Home Case Index All Cases GST GST + AAR GST - 2020 (10) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 1325 - AAR - GSTLevy of GST - activity of development and sale of land - Classification of the activity - taxable value of the supply - admissibility of ITC - HELD THAT:- In the present case, it is found that the applicant has proposed to undertake the required project and therefore has filed the application for clarification on the questions under the Act. Therefore, the application is covered under Section 95(a) of the Act. The issue is sale of developed land for which no testing is required. Further we find support of admitting the present application in the judgment of Hon'ble Supreme Court given in the case of NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION VERSUS COMMISSIONER OF INCOME TAX, DELHI-V [2020 (9) TMI 496 - SUPREME COURT]. The Court was of the opinion that a vibrant system of Advance Ruling can go a long way in reducing taxation litigation. This is not only true of these kinds of disputes but even disputes between the taxation department and private persons, who are more than willing to comply with the law of the land but find some ambiguity - thus, in terms of Section 97(2) of the Act, the present application is admitted. Whether the activity of development and sale of land is taxable under GST or otherwise? Ruling as per Amit Gupta, Member:- HELD THAT:- In the present case since there is no construction of any civil structure on the developed plot by the applicant there is no need of completion certificate by the applicant. For the area as a whole there will be development activities as per local bye laws but the same is not a part of sale to the end customer. There is absolutely no provision of completion certificate by any competent authority in respect of sale of land - there is no contractual relationship between the applicant and the end customer. In paragraph 5 (b) of schedule H there is intention for sale to buyer and therefore there is agreement between the parties. In the present case the entire consideration is to be received at the time of sale deed for the sale of land upon payment of applicable stamp duty. So, the sale of developed plot cannot fall under paragraph 5(b) of schedule II - since the sale of developed plot does not constitute supply of goods or services, there is no question of tax (CGST/SGST) on the sale of land. All other questions are not required to be answered since there is no tax on the sale of land. Ruling as per Shri Anurag Mishra, Member:- HELD THAT:- The applicant is going to undertake substantial development of the land before giving it out for sale to the end customers. Since these development activities are covered in clause (b) of paragraph 5 of schedule II therefore the sale of developed land will be treated as supply of service in terms of paragraph 5 of schedule II and thus, taxable in the eye of law. Since both the members have different views on the taxability of 'sale of developed land/plot', the other issues related to it becomes irrelevant and hence, the ruling cannot be given to such related issues. Since there are different views, a reference is made to the Appellate Authority for hearing and decision on said issue in terms of Section 98 (5) of the Act ibid which provide that where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question.
|