Circular No. 177/09/2022-TRU
9.3 Such services are nothing but “rental services of transport vehicles with operator” which
fall under heading 9966 and attract GST @ 18% under Sr. No. 10 part (iii) of notification No.
11/2017- Central Tax (Rate) dated 28.06.2017. The person who takes the vehicle on rent defines
how and when the vehicles will be operated, determines schedules, routes and other operational
considerations. The person who gives the vehicles on rent with operator can not be said to be
supplying the service by way of transport of goods.
9.4 Accordingly, as recommended by the GST Council, it is clarified that such renting of trucks
and other freight vehicles with driver for a period of time is a service of renting of transport
vehicles with operator falling under Heading 9966 and not service of transportation of goods by
road. This being so, it is not eligible for exemption under Sl. No. 18 of notification No. 12/2017-
Central Tax (Rate) dated 28.06.2017. On such rental services of goods carriages where the cost of
fuel is in included in the consideration charged from the recipient of service, GST rate has been
reduced from 18% to 12% with effect from 18.07.2022. Prior to 18.07.2022, it attracted GST at
the rate of 18%.
10. Whether location charges or preferential location charges (PLC) collected in addition
to the lease premium for long term lease of land constitute part of the lease premium or of
upfront amount charged for long term lease of land and are eligible for the same tax
treatment;
10.1 Representation has been received seeking clarification whether location charges or
preferential location charges (PLC) collected in addition to the lease premium for long term lease
of land constitute part of the lease premium or upfront amount charged for long term lease of land
and are eligible for the same tax treatment.
10.2 As per entry 41 of the notification No. 12/2017- Central Tax (Rate) dated 28.06.2017
upfront amount, which is defined as “upfront amount (called as premium, salami, cost, price,
development charges or by any other name) payable in respect of service by way of granting of
long term lease (of thirty years, or more) of industrial plots or plots for development of
infrastructure for financial business, provided by the State Government Industrial Development
Corporations or Undertakings or by any other entity having 20 per cent or more ownership of
Central Government, State Government, Union territory to the industrial units or the developers
in any industrial or financial business area”, is exempt from GST
10.3 Allowing choice of location of plot is integral part of supply of long-term lease of plot and
therefore, location charge is nothing but part of consideration charged for long term lease of plot.
Being charged upfront along with the upfront amount for the lease, the same is exempt.
10.4 Accordingly, as per recommendation of the GST Council, it is clarified that location
charges or preferential location charges (PLC) paid upfront in addition to the lease premium for
long term lease of land constitute part of upfront amount charged for long term lease of land and
are eligible for the same tax treatment, and thus eligible for exemption under Sl. No. 41 of
notification no. 12/2017- Central Tax (Rate) dated 28.06.2017.
11. Applicability of GST on payment of honorarium to the Guest Anchors