Important Keyword: IGST Notification 27/2019, long term lease GST exemption, industrial land IGST, GST land lease India, IGST exemption notification,
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[F. No. 354/204/2019- TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 31st December, 2019
Notification No. 27/2019 - Integrated Tax (Rate): To amend notification No. 9/ 2017- Integrated Tax (Rate) so as to exempt certain services as recommended by GST Council in its 38th meeting held on 18.12.2019.
GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R....(E).- In exercise of the powers conferred by sub-section (3) and sub-section (4) of section 5, sub-section (1) of section 6 and clause (xxv) of section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), read with sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council,
Hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.9/2017- Integrated Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 684 (E), dated the 28th June, 2017, namely:-
In the said notification, in the Table, against serial number 43, -
- in column (3), for the figure “50”, at both the places where they occur, the figure “20 ” shall be substituted;
- for the entry in column (5), the following entries shall be substituted, namely, -
| (5) |
| “Provided that the leased plots shall be used for the purpose for which they are allotted, that is, for industrial or financial activity in an industrial or financial business area: Provided also that the State Government concerned shall monitor and enforce the above condition, as per the order issued by the State Government in this regard: Provided further that in case of any violation or subsequent change of land use, due to any reason whatsoever, the original lessor, original lessee as well as any subsequent lessee or buyer or owner shall be jointly and severally liable to pay such amount of integrated tax, as would have been payable on the upfront amount charged for the long term lease of the plots but for the exemption contained herein, along with the applicable interest and penalty: Provided also that the lease agreement entered into by the original lessor with the original lessee or subsequent lessee, or sub- lessee, as well as any subsequent lease or sale agreements, for lease or sale of such plots to subsequent lessees or buyers or owners shall incorporate in the terms and conditions, the fact that the integrated tax was exempted on the long term lease of the plots by the original lessor to the original lessee subject to above condition and that the parties to the said agreements under take to comply with the same.” |
2. This notification shall come into force with effect from the 1st day of January, 2020.
(Ruchi Bisht)
Under Secretary to the
Government of India
Note: -The principal notification No. 9/2017 - Integrated Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 684 (E), dated the 28th June, 2017 and was last amended by notification No. 20/2019 – Integrated Tax (Rate), dated the 30th September, 2019 vide number G.S.R. 733(E), dated the 30th September, 2019.
📚 Frequently Asked Questions (FAQs): Notification No. 27/2019 - Integrated Tax (Rate)
Q1: What is Notification No. 27/2019 – Integrated Tax (Rate)?
Answer:
It amends Notification No. 9/2017 – Integrated Tax (Rate) to modify and expand IGST exemption on long-term lease of industrial/financial plots, effective 1 January 2020 notfctn-27-2019-igst-rate-engli….
Q2: From which date is this notification applicable?
Answer:
The notification is applicable from 1 January 2020.
Q3: Which entry is amended under this notification?
Answer:
Serial No. 43 of Notification No. 9/2017 – Integrated Tax (Rate).
Q4: What major relief is provided by this notification?
Answer:
The minimum lease period for exemption is reduced from 50 years to 20 years.
Q5: Which type of land leasing is covered?
Answer:
Long-term lease of plots used for industrial or financial business activity.
Q6: Is the exemption unconditional?
Answer:
No ❌.
It is conditional, subject to:
Proper land use
State Government monitoring
Compliance with agreement terms
Q7: What happens if land use conditions are violated?
Answer:
IGST becomes payable along with interest and penalty by:
Original lessor
Original lessee
Subsequent lessees/buyers (jointly & severally)
Q8: Can you explain with a real-life example?
Answer:
📌 Example:
A State Industrial Development Corporation leases a plot for 30 years to a manufacturing unit.
👉 IGST exemption applies.
If the unit later converts it into residential property, IGST + interest + penalty becomes payable.
Q9: Who monitors compliance under this exemption?
Answer:
The State Government concerned must monitor and enforce land-use conditions.
Q10: Is it mandatory to mention exemption terms in the lease deed?
Answer:
Yes ✅.
The lease/sale agreement must explicitly mention the IGST exemption and conditions.
Q11: Does this exemption apply to residential plots?
Answer:
No ❌.
It applies only to industrial or financial business areas.
Q12: Does this amendment affect GST registration?
Answer:
Indirectly.
Entities involved must maintain active GST registration where applicable.
👉 Get GST registration support from Finodha
🔗 https://finodha.in/online-gst-registration/
Q13: Is ITC involved in this exemption?
Answer:
No ITC arises, as the upfront lease premium itself is exempt.
Q14: Is this amendment based on GST Council recommendation?
Answer:
Yes ✅.
It is based on the 38th GST Council Meeting held on 18.12.2019 notfctn-27-2019-igst-rate-engli….
Q15: Who should carefully evaluate Notification No. 27/2019 – Integrated Tax (Rate)?
Answer:
Industrial developers
State authorities
Corporate land lessees
GST consultants
👉 Need expert review? Contact Finodha GST Experts
🔗 https://finodha.in/gst-compliance/
Conclusion🚀:
Notification No. 27/2019 – Integrated Tax (Rate) strikes a balance between ease of doing business and revenue protection by widening IGST exemption while enforcing accountability.
Download PDF: Notification No. 27/2019 - Integrated Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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