TMI Blog2018 (10) TMI 1868X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction in the nature of Sale of Land is not covered with in the preview of GST, hence no GST is payable on the transaction resulting in the sale of lands. Transaction of transferring 20% share of their plots by the landowners to the Applicant - HELD THAT:- The question is itself answered in the querry of the Applicant that it is consideration for the works contract services rendered by the Applicant and therefore, we do not agree with the understanding of law by the Applicant on this part of the transaction. The transfer value of the plots will be considered as consideration paid by the land owners for the services rendered by the Applicant for development of their land and will be regarded as 'works contract, services attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and approx. 3% are entitled to be developed as Commercial area. Apart from these, the rest of the area would be covered under roads, parks, facilities etc. Thus the Saleable area will be Approx. 55% as residential Plots and 3% as commercial plots. As per the collaboration agreement proposed to be entered into, the Applicant and Land owners all the land owners will give to the applicant 20% plotted area in consideration of the doing following activity by the applicant :- a. Applying and obtaining for license to get the license to develop the residential plotted colony of the proposed land, using its technical and financial capabilities for the same. b. Development of the residential plotted colony (On its own or by providing wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction resulting in the sale of lands. This view of the Applicant GST will not be applicable in this case as this sale/transfer of Plot in a plotted colony is sale/ transfer of land and GST in not applicable on sale/Transfer of land. For Question No.2 As per Section 3(a) of Land Acquisition Act, 1894, the expression 'land' includes benefits that arise out of land and things attached to earth or permanently fastened to anything attached to the earth. In the case of Safiya Bee vs Mohd. Vajahath Hussain - (2011) 2 SCC 94 = 2010 (12) TMI 1187 - SUPREME COURT , the Apex court held that 'land' includes rights in or over land, benefits to arise out of land. The Apex court in the case of Pradeep Oil Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will transfer 20% of their share of the developed property as a consideration towards the works contract services provided by the Applicant to the land owners. In the above proposed agreement there are in-fact two kinds of transactions. One pertains to booking/selling of plots to be done by the Applicant and the Land owners during the development (before completion of the development work) of the township and the other is transfer of 20% share of developed land/plots by each of the land owners to the Applicant. So far as the first transaction of booking/sale of developed plots by the Applicant and the land owners is concerned, it amounts to sale of land and the understanding of the Applicant of the law regarding this aspect of the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and owners during the development of the township will remain a transaction of sale/transfer of land and thus will not attract GST. It is immaterial whether the said booking/sale is done before completion or after completion of the development work. 2. Whether GST will be applicable on the 20% share of licensed plotted area agreed to be provided by the land Owners to the Applicant (developer),If GST is applicable then what will be the taxable value and applicable tax rate in this case. Ruling : Yes. It is consideration for the works contract services rendered by the Applicant and therefore, is a service independent of sale of land. The transfer value of the plots will be considered as consideration paid by the land owners for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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