The Karnataka Authority for Advance Rulings (AAR) held that the heads could not impose the GST on the assessee to sell the land plots securing the basic infrastructure. The same comprises levelling the land and installation of sewage lines which are essentials.
The GST law has held land out of its reach with a mention at point 5 of Schedule III of the CGST Act. but people said in open litigations that when the land would get sold with the basic development then these sellers should file GST.
Following the outcome of the 47th GST council meeting, the Central Board of Indirect Taxes and Customs (CBIC) allocated Circular 177 dated 3rd August, which restricted the confusion. Under the Schedule III of the CGST Act, land after leveling or laying of water or drainage or electricity lines continues to be “land”. Thus these developed land plots would get sold and they are recognized as the kind of lands beneath the GST law and no GST will be levied on selling.
The services of developing the land like laying pipes and connections would get imposed with GST as per the standard rates.
an unregistered person under GST, Rabia Khanum is mandated to apply for the advance rulings with the Karnataka bench. The land that has been sold was made with the basic facilities and a power substation for electricity as the administration would not permit these sales or permit any lands without the same utilities.
The petitioner revealed does GST should get levied and then got an answer citing that the plots with the completion of the basic amenities are not subject to GST. But the rulings would be provided, it has been issued for the GST levy on land selling.
The Gujarat GST AAR rendered that the land sold with the basic utilities draws GST the same consists of the waterline, drainage, and electricity. The assessee should verify the kind of actions on the land that is being performed. In the order, it stated that sellers fix the prices as per the super built-up area and not the plot’s total area calculated.
Point 5(b) of Schedule II specified that the construction of any complex, building or civil structure for the sale is deemed to be the supply of service and applicable for the GST.
The advance ruling merely restricts the applicant. It gave the signal to the industries to get ready.
