CA Umesh Sharma
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Arjuna (Fictional Character): Krishna, what circular has been passed under GST Act regarding sale of developed plot? Krishna (Fictional Character): Arjuna, on 3rd August 2022 Circular No. 177/09/2022-TRU was passed for clarifying the taxability for sale of developed plot under GST. Arjuna (Fic
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FAQ :
No, the sale of a developed plot is generally not taxable under GST. Land is an immovable property and its sale is neither considered a sale of goods nor a supply of services, making it exempt.
The sale of a developed plot itself remains exempt. However, the services provided by a developer for the development of the land, such as levelling, laying drainage and water lines, electricity lines, and street lights, are taxable under GST.
If a landowner pays a developer for services rendered in developing the land, the amount paid for these development services attracts GST at the applicable rate.
While the sale of land is not taxable under GST, it's crucial to examine transactions carefully. The sale price might include development charges, and these development charges are subject to GST.
Circular No. 177/09/2022-TRU, passed on 3rd August 2022, clarifies the taxability for the sale of developed plots under GST.
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