Case Law Details
Shraddha Tiwari Vs Bhopal Development Authority (Madhya Pradesh High Court)
Challenge in this petition filed under Article 226 of the Constitution of India is to the land allotment notices dated 23-11-2021 and 09.12.2021 Annexures P/1, P/2, P/3, P/4 & P/5 by which GST @ 12% has been levied upon the sale consideration for purchase of developed land upon the petitioners who happen to be purchasers of the said land from Bhopal Development Authority.
During the pendency of this petition the counsel for respondent No. 1 Bhopal Development Authority and GST brought to the notice of this Court circular dated 03.08.2022 issued by Government of India, Ministry of Finance, Department of Revenue, issuing clarifications regarding applicable GST rates & exemptions on certain services, which inter-alia provide thus:-
“14. Whether sale of land after levelling, laying down of drainage lines etc., is taxable under GST.
(14.1) Representation has been received requesting for clarification regarding applicability of GST on sale of land after levelling, laying down of drainage lines etc.
(14.2) As per Sl. No. (5) of Schedule III of the Central Goods and Services Tax Act, 2017, sale of land™ is neither a supply of goods nor a supply of services, therefore, sale of land does not attract GST.
(14.3) Land may be sold either as it is or after some development such as levelling, laying down of drainage lines, water lines, electricity lines, etc. It is clarified that sale of such developed land is also sale of land and is covered by Sr. No. 5 of Schedule III of the Central Goods and Services Tax Act, 2017 and accordingly does not attract GST.
(14.4) However, it may be noted that any service provided for development of land like levelling laying of drainage lines (as may be received by developers) shall attract GST at applicable rate for such services.
3. In view of the aforesaid clarification issued by the Government of India, Ministry of Finance, Department of Revenue, it would be appropriate that the Bhopal Development Authority applies its mind again on the question as to whether GST deserves to be levied in given facts and circumstances or
4. Accordingly, this petition is disposed of with direction to the Bhopal Development Authority to reconsider the question of levy of GST on the sale of developed plots to the petitioners in the light of aforesaid circular dated 08.2022 issued by Government of India, Ministry of Finance, Department of Revenue.
5. It is clarified that while doing so, Bhopal Development Authority shall not be influenced by the impugned orders dated 23-11- 2021 and 09.12.2021 Annexures P/1, P/2, P/3, P/4 & P/5 in respect of petitioners.
6. Let the aforesaid exercise be concluded within a period of 60 days from the date of receipt of copy of this order.
