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TMI Blog2018 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... nt shall either purchase land or it shall enter into collaboration agreements with various land owners whereby the applicant shall acquire the right to develop the property and further sell the units developed thereon. a. In case of purchased land: the applicant shall be entitled to sell all the units developed thereon, b. In cases of development and sale rights: the applicant shall be entitled to sell the flats/ unit falling to the applicant's share, in terms of the collaboration agreement. Development and construction of Project 3. Post purchase of land/ acquisition of land rights: a. The applicant shall apply for the requisite approvals. b. The applicant plans to get the construction work done by contractors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... ... (2) Notwithstanding anything contained in sub-section (1), - (a) activities or transactions specified in Schedule III: or (b) ... shall be treated neither as a supply of goods nor a supply of services." 9. A perusal of the above extracted provision shows that all transactions provided under Schedule III of the CGST Act are out of the purview of GST and no GST is leviable on the said activities/ transactions. 10. The relevant Entry under the said Schedule, for the purpose of instant application, reads as under "SCHEDULE III ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES. 1. ... 2. ... 3. ... 4. Sale of land and, subject to clause (b) of para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2 of Central Goods and Services Tax Act, 2017. 9 - (iii) construction services other than (i) and (ii) above. 9 - Paragraph 2: In case of supply of service specified in column (3) of the entry at item (i) against serial no. 3 of the Table above, involving transfer of property in land or undivided share of land, as the case may be, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply. Explanation .- For the purposes of para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier". Hence, if construction activity is done on behalf of the buyer i.e. as a supply of goods or services to the buyer, GST is payable. 17. It is also observed that during the construction of a complex, building etc., the land and its superstructure becomes inseparable and hence, separate sale of land and its superstructure does not appear to be permissible. During the hearings, the applicant was asked to submit a sample copy of 'Registered Sale Agreement' in Delhi where sale of land and sale of its su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds to be ascertained. 22. In this case, the measure of tax should be the value of goods and services supplied by excluding the value of land. However, since land cannot be separately sold, a deemed value of land need to be ascertained on which GST would not be payable. 23. The applicant wants the value of land to be ascertained by him on the basis of Rule 30 of CGST Rules, 2017, as the said Rules, do not provide any other specific provision to ascertain the value of land for exclusion. 24. It is also observed that a similar issue under Service Tax was decided by Hon'ble High Court of Delhi under W.P. (Civil) No. 2235/2011 in the case of Shri Suresh Kumar Bansal V/s Union of India. The Hon'ble High Court held in its judgement dated 03.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory machinery provisions to ascertain the value of services involved in a composite contract. 25. However, under GST Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 - S. No. 3 r/w Paragraph 2, the deemed value of land or undivided share of land has been fixed at one-third of the total amount charged. Hence, in GST, the machinery provisions to ascertain the value of land is available in the notification which has been issued under Sub-Section (5) of Section 15 of the CGST Act, 2017 regarding value of taxable supply. The said sub-section (5) of Section 15 of CGST Act, 2017 reads as under: "Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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