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?
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Sale of developed plot of land under GST
Replies (2)
Quick Summary
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.
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.
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.
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