Case Law Details
In re Satyaja Infratech (GST AAR Gujarat)
The activity of purchase of land and selling the said land by converting in to integrated residential sub plots of varying sizes under the name of ‘Bliss Homes’ with the basic facility is liable to GST.
The activities of applicant will fall under the clause (b) of paragraph 5 of Schedule -II of Gujarat Goods and Services Tax Act and Central Goods and Services Tax Act. Hence the activities of the applicant attract 9% CGST and 9% SGST as per serial no 3 of Notification No. 11/2017 Central Tax (Rate) dated 28-06-2017.
FULL TEXT OF ORDER OF BEFORE THE AUTHORITY OF ADVANCE RULING,GUJARAT
1). The Applicant M/s. Satyaja Infratech is engaged in purchase of land and selling the said land by converting in to integrated residential sub plots of varying sizes under name of “Bliss Homes” with following basic facilities:-
(i) compound wall
(ii) Main entry gate
(iii) Internal plot separation walls
(iv) Internal roads of RCC and Paver Block
(v) Plantation surrounding plots
(vi) Common plot developments
(vii) Rain water harvesting system for rain water discharge (viii) Common bore well with extra emergency submersible pump
(ix) Drainage system
(x) Children play area
(xi) Construct Club house with various amenities
(xii) Underground water supply and electricity connection to each plot (xiii) Swimming pool
(xiv) Botanical Garden
(xv) Tennis Court
The applicant is providing basic necessary facilities for members so they will not face hurdles whenever they built their home on their plots. Out of the above mentioned facilities some facilities like plantation, drainage system, internal road and bore well facilities are must for plot selling for residential purpose as per common GDCR of Government of Gujarat.
2) The applicant has requested for advance ruling as to what would be the rate of tax to be charged to the client in the given matter.-
1. Whether the activity of purchase of land and selling the said land by converting in to integrated residential sub plots of varying sizes under name of “Bliss Homes” with basic facilities prescribed is liable to GST or not ?
2. If the same is liable for GST then under which category of supply it will fall and what will be the rate of GST on it?
3) The Applicant has further submitted that,-
1. It is to be noted that the firm, who purchases land and it develops the land with an infrastructure such as drainage system, roads and plantation of plants as mentioned above. After this development of the land, it will not do any building constructions and all. It sales only developed land as plots.
2. As per Applicant interpretation under CGST Act, it is considered as sale of land and the same is not supply of goods/services as stated in Schedule-III para 5. Hence, the sale of land is not taxable under GST law.
4) The activities or transactions which shall be treated neither as a supply of goods nor a supply of services are prescribed in Schedule III of CGST Act. In this Schedule, at serial No. 5, the following details are mentioned:-
“5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building”
Clause (b) of paragraph 5 of Schedule II says as follows
(b) Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.
Explanation.- for the purposes of this clause,-
(1) the expression “competent authority” means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:-
(i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or
(ii) a chartered engineer registered with the Institution of Engineers (India); or
(iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority;
(2) the expression “construction” includes additions, alterations, replacements or re-modelling of any existing civil structure;
5) We have considered the submissions made by the applicant in their application for advance ruling.
6) The issue involved in this case is regarding appropriate rate of Goods and Services Tax applicable on the services provided by the applicant.
7) Following para in sale deed is as follows.-
“whereas the vendor has formed a scheme for the development of the schedule ‘A’ property into residential community scheme known as “Bliss Homes” and has divided the schedule ‘A’ property into “(a) Different sub-plots of varying sizes, (b) common internal roads or passages and (c) common amenities areas” for the residential purpose. Thereafter, the vendor allotted the said plots of the said scheme on the schedule ‘A’ property to their members for a valuable consideration.”
“whereas, the vendor herein is desirous of selling the sub-plot no-4 total admeasuring super buildup area 316 Sq. yards i.e. 264.2 mtrs.(Including the proportional share in common areas such as internal roads, common amenities, passage etc.) and consecutively carpet area 196.5 sq. mtrs i.e. 164.3 s. yards developed on the schedule ‘A’ property. “
8. In view of the foregoing, we rule as under –
RULING
1. The activity of purchase of land and selling the said land by converting in to integrated residential sub plots of varying sizes under the name of “Bliss Homes” with the basic facility is liable to GST.
2. The activities of applicant will fall under the clause (b) of paragraph 5 of Schedule -II of Gujarat Goods and Services Tax Act and Central Goods and Services Tax Act. Hence the activities of the applicant attract 9% CGST and 9% SGST as per serial no 3 of Notification No. 11/2017 Central Tax (Rate) dated 28-06-2017.
