In re Shree Dipesh Anilkumar Naik (GST AAAR Gujarat)
GST leviable on the sale of land provided with construction of primary amenities
The AAAR, Gujarat in the matter of Shree Dipesh Anilkumar Naik [Advance Ruling No. GUJ/GAAAR/APPEAL/2021/35, dated December 12, 2021] affirmed the order passed by the AAR holding that GST is leviable on sale of plot of land, where primary amenities such as water line, electricity line, and other infrastructure are being constructed/developed. Held that, it is a sale of developed plots and will be covered under the scope of supply of taxable service falling under the head of ‘Construction services’. Hence liable to 18% GST.
Facts:
Shree Dipesh Anillkumar Naik (“the Appellant”), is a farmer having a vacant land, for which the Appellant got the necessary approvals for proposed project from the Plan Passing Authority i.e. Jilla Panchayat (“the Authority”) as per which the seller of land prior to its sale is mandatorily required to develop the primary amenities like sewerage and drainage line, water line, electricity line, land levelling for road, pipe line facilities for drinking water, street lights, telephone line etc. and sell the individual plots to different buyers with such amenities without any construction on the land.
This appeal has been filed against the order passed by the AAR, Gujarat in Advance Ruling No. GUJ/GAAR/R/2020/11 dated May 19, 2020 wherein, it was held that, the Appellant is liable to pay GST on sale of plot of land, where such primary amenities are constructed, under Para 5(b) of Schedule-II to the Central Goods and Services Tax Act, 2017 (“the CGST Act”). Further held that activities of constructing common amenities clearly indicates that sale of developed plot and is not equivalent to sale of land but is a different transaction which tantamounts to supply/rendering of service.
Issue:
Whether GST is applicable on sale of plot of land where, such primary amenities are provided by the Appellant as per the requirement of the Authority?
Held:
The AAAR, Gujarat in Advance Ruling No. GUJ/GAAAR/APPEAL/2021/35, dated December 12, 2021 held as under:
