Sale of developed plot of land under GST

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Hitesh Patel

Manager Accounts

32 Points Posted on 02 December 2021

we have purchased land and planning to sale of developed industrial open plot of land (Developing like land leveling streetlight electricity Water Line drainage facility and RCC Road facilities etc.,)
Does the required GST registration? if yes, on which amount GST should be charged? including land value in land value OR only on additional services excluding land value?
what are the methods to calculate taxable value on which GST leviable. if we doesn't show amenities value separately from land value is there any obligation to show both values separately in any provision of GST?

Replies (2)

Quick Summary

This discussion addresses the complex issue of Goods and Services Tax (GST) on the sale of developed plots of land. While the department often treats such sales as outside GST's purview, professionals argue that the development services provided make it taxable. The content explores different interpretations and references Advance Ruling Authority (AAR) cases from Kerala and Gujarat, suggesting that selling developed plots, especially with amenities, may indeed be liable for GST on the development charges.

CA Altamush Zafar

GST Consultant

10402 Points Posted on 02 December 2021

This is a highly debated topic among professionals. Although as of now the department is treating sale of developed plots as sale of land and therefore it is treating it out of purview of GST. However many professionals are of the view that there is service involved in developing the plots and therefore it is taxable.

I would suggest you to take a proper professional opinion for this matter.

CA ABHAY GUPTA

Practice

1639 Points Posted on 03 December 2021

Kindly refer following AAR paased in different state
1. PPD Living Spaces Private Limited (GST AAR Kerala) dated 26-09-2018. In this case Land owner charged separately for Land and development of roads up, water and electricity supply to each plot, water drains, trees, party hall, health club, play courts, compound wall and collected GST at the rate of 18% only on development charges. Applicate have taken ITC received on development of said facilities.

2. Satyaja Infratech (GST AAR Gujarat) dated 20-09-2019. held: Sale of developed land with the basic facilities is liable to GST.

3. Shree Dipesh Anilkumar Naik (GST AAR Gujarat) dated 19-05-2020: held: sale of developed plot is not equivalent to sale of land but is a different transaction. Sale of such plotted development tantamount to rendering of service. This view has also been taken by the Supreme Court in the case of M/s Narne Construction P Ltd. reported at 2013 (29) STR 3 (SC).

Thus if you sale plot with development liable to GST.