GST on Development Charges for Developed Plots

GST rate on Development charges ?

Rachit Parikh

Article Assistant

20 Points Posted on 12 July 2020

Private Limited company selling developed plots to the end consumer !! for this they are charging development charges seperately apart from receiving consideration for sale of plot !! Treating both the transaction separate i.e. sale of land and development activity !!

what gst rate is applicable on collecting such development charges ?

Replies (5)

Quick Summary

This discussion explores the applicable GST rate on development charges collected separately by a private limited company selling developed plots. The core question is whether these charges, distinct from the plot sale consideration, are subject to GST and, if so, at what rate. The consensus leans towards an 18% GST rate, similar to service charges, as development activities are generally taxable.

Ravi SADhiyan

Practice

20 Points Posted on 12 July 2020

Originally posted by : Rachit Parikh
	Private Limited company selling developed plots to the end consumer !! for this they are charging development charges seperately apart from receiving consideration for sale of plot !! Treating both the transaction separate i.e. sale of land and development activity !! what gst rate is applicable on collecting such development charges ?

The issue remains to be debated whether term ‘land’ will include ‘immovable property’ in its ambit, whether transfer of development right, is not included in the phrase ‘sale of land’ as definition of land includes benefits arising out of land also.