Adv. Sarvesh Dwivedi
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What is an immovable property?
An immovable property is an immovable object, a property that cannot be moved without destroying or altering it. It is fixed to the earth, such as a piece of land or a house.
Immovable property includes premises, property rights (for example, inheritable building right), houses, land and associated goods, and chattels if they are located on, or below, or have a fixed address.
Taxability of services of immovable property
Before GST
Service tax was applicable on taxable services provided in relation to an immovable property.
After GST
GST is now applicable in place of service tax.
The type of GST to be charged will depend if the supply is intra-state or inter-state. This will be ascertained by determining the place of supply of the service.
Place of Supply for Services of Immovable Property
*Place of Supply will be the location of property
| Supply of service | Place of supply |
| Directly in relation to an immovable property. Including services provided by
Ø Architects Ø Interior decorators, Surveyors Ø Engineers Ø Other experts or estate agents Ø Service of grants of rights to use immovable property Ø Carrying out/co-ordinate of construction work |
Location at which the immovable property.
If immovable property is located outside India, then the place of supply shall be the location of the recipient |
| Lodging accommodation in a hotel, inn, club, campsite etc.
Includes house boat or any other vessel |
If the immovable property (or boat/vessel) is located in more than one State then all the states will be considered as place of supplies in proportion in value of services. The states will share GST in proportion to the value of services.
Input Tax Credit
Place of supply of services provided in relation to an immovable property is the location of the immovable property which means GST will be CGST and SGST.
CGST and SGST credit of one state cannot be used to set-off the liability of another state.
In the cases of Akash Electronics & Mrs. Bagchi (cases of hotel accommodations), a registered person takes the services of an immovable property in a different state. Akash Electronics is paying CGST & SGST (Maharashtra) although it is registered in Gujarat. Therefore, it cannot claim ITC of Maharashtra SGST against output Gujarat SGST. However, input CGST can be adjusted against output CGST.
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