TMI Blog2018 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification has been issued under Section 15(5) of the CGST Act, 2017 by the Government on the recommendation of the GST Council and hence, no separate Rule was required to be issued. Paragraph 2 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 is fully authorised by Section 15(5) of the CGST Act, 2017 to provide machinery provisions to ascertain the value of land for exclusion and to measures the value of supply of goods and services for levy of GST. The said machinery provisions cannot be equated with exemption Notification issued under Section 93(1) of the Finance Act, 1994 which were held to be insufficient by the Hon’ble High Court [2016 (6) TMI 192 - DELHI HIGH COURT]. Ruling:- the value of land, or the undivided share of land, as the case may be, would be deemed to be one-third of the total amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling: a) Whether GST will be applicable on the sale of undivided and impartible share of land represented by Agreement to sell the land? b) Whether GST shall be applicable on sale of superstructure (which is under construction)? c) If yes:- i. What will be the value on which tax is payable? ii. What would be the applicable rate for charging GST? Views of The Applicant: 7. Sale of land is out of the scope of the definition of Supply under GST, as the same has been prescribed under Entry 5 of Schedule III of the CGST Act, 2017. Consequently, transfer of undivided and impartible share in land would not be leviable to GST. 8. For the purpose of analysing the above transaction, it is of importance to have a perusal of the relevant portion of the provisions providing for the scope of supply , which reads as under: 7. (1) For the purposes of this Act, the expression supply includes- ... ... (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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contract as defined in clause 119 of section 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 paragraph 2, total amount means the sum total of,- (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be. Discussion: 14. The issue for decision in this case is regarding value and rate of tax for payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act etc. to claim that land and building are two different assets or immovable property and that land and superstructure can be independently sold and purchased. However, under GST, the valuation of supply of goods and services has to be done in accordance with Section 15 of the CGST Act, 2017. 19. Further, even if separate values would be available for land and goods services, the paragraph 2 of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 would be applicable for ascertaining value of goods and services for levy of GST, as discussed below. 20. The supply in this case is a composite supply consisting of three components, namely (i) land on which the complex or building is constructed, (ii) goods which are used in construction activities and (iii) services undertaken by the applicant directly or through other contractors. 21. While admitting that GST cannot be levied on the value of land or value of undivided share of land, the question which needs to be answered is how the value of the said land needs 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. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Government on the recommendations of the Council shall be determined in such manner as may be prescribed. 26. The said Notification has been issued under Section 15(5) of the CGST Act, 2017 by the Government on the recommendation of the GST Council and hence, no separate Rule was required to be issued. Hence, Paragraph 2 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 is fully authorised by Section 15(5) of the CGST Act, 2017 to provide machinery provisions to ascertain the value of land for exclusion and to measures the value of supply of goods and services for levy of GST. The said machinery provisions cannot be equated with exemption Notification issued under Section 93(1) of the Finance Act, 1994 which were he ..... 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