GST Applicability, Goods and Services Tax - GST

Land aggregator is entrusted with the work of creating a large land Bank.

His scope of work is to pool together different (adjustment) land owners who will agree to sell the land to the aggregator or his nominee.

He does this on behalf of a corporate who are interested in a acquiring large area for constructing their godown/factory etc.

The aggregator's work involves conversion of land use, laying of approach road, removal of trees & structures, leveling of land etc. The land is sold to the company directly by the land owners. The company will pay the “X” amount to land owner and “Y” amount to land aggregator.

My question is whether the Land aggregator is liable to GST, If yes, whether on “Y” amount or total of X + Y. Can this be classified as “Composite Supply” of which principal supply is service in nature and hence the total of X+Y suffers GST @ 18%

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1 Dated: 20-4-2021 By:- Punit Agarwal

In my opinion:

Whether the Land value will be included in the Value of Supply totally depends upon the contract.

If the contract is only for arranging land owner to sell the land and make the land suitable for construction then the Value of land will not be included in Supply value. Amount to be shown separately for each services will help excluding the value of land from the supply value.

However, if the contract says that the aggregator to arrange all necessary amenities including land to make the land suitable for construction then the value will definitely be included.

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