TMI Blog2021 (9) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... are 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. Accordingly, the appellant contention to allow the deduction of actual value of land from the sale value on the grounds that their land value is ascertainable and other grounds is not legal in terms of para 2 of Not. No. 11/2017-CT (Rate) dated 28.06.2017 as amended vide Not. No. 1/2018-C.T. (Rate), dated 25-1-2018. The reliance of Rule 18(A)(A) of the erstwhile Gujarat Value Added Tax Rules, 2006 is unjustified in the instant case since the Value Added Tax Act has been subsumed with GST Act. The Value Added Tax Act does not have any legal value in determination of GST liability since the value of supply is to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is deemed to be one third (33.33%) of the total amount (i.e. value including land value) and GST is payable on balance amount. But in applicant s case the value of Land is clearly ascertainable. In that case actual cost of Land can be deducted for the for the purpose of arriving at the taxable value of supply? 4. The appellant has submitted that they are engaged in the business of construction and buy land to develop residential/ commercial property on that land. They enter into the agreement with prospective buyers for such residential /commercial property and agreements entered into are for inclusive of land or undivided share of land basis. Their cost of land which is being transferred to the buyers on inclusive of land or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial property with undivided rights of land? Answer : The value to be arrived in terms of deeming provision of Para 2 of Notification no. 11/2017-CT (Rate) dated 28.06.2017, as amended by Not. No. 1/2018-C.T. (Rate), dated 25-1-2018. Question 2: In the case of construction of residential/commercial complex, the builder charges an amount which is inclusive of land or undivided share of land. As per Not No. 11/2017-CT (Rate) and 08/2017-I.T (Rate) both dated 28.06.2017 the land value is deemed to be one third (33.33%) of the total amount (i.e. value including land value) and GST is payable on balance amount. But in applicant s case the value of Land is clearly ascertainable. In that case actual cost of Land can be deducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to the extent of one third value and not the actual value of land on undivided share basis from the total value charged for subject supply is contrary to the GST s design of taxing land out of the purview of GST. (v) As per erstwhile Rule 18 (AA) of Erstwhile Value Added Tax Rules, 2006 when amount of labour is not ascertainable for works contract transactions, a prescribed ratio/percentage is applied to determine the amount to be deducted. (vi) The deemed value as prescribed in the Notification No. 11/2017- CT (Rate) and 08/2017-IT (Rate) both dated 28.06.2017 can be applied when the value of land is not ascertainable. Whereas in the instant case value of land is ascertainable; therefore, value of land an immovable property wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Not. No. 08/2017-IT (Rate) both dated 28.06.2017. 12. We find that the applicant s above grounds of contention, as stated in aforesaid para to allow the deduction of actual value of land from the transaction value instead of deduction, as defined in the Notification No. 11/2017-CT (Rate) dated 28.06.2017, is not tenable and beyond the purview of legality. In para 2 of the Not. No. 11/2017-CT (Rate) dated 2017, as amended by Not. No. 01/2018-CT (Rate), the value of land or undivided share of land required to be deducted from the total amount charged for the subject supply has been clearly provided. The relevant Paragraph 2 of the Notification No. 11/2017-CT (Rate) dated 28.06.2017, is read as under : 2. In case of supply of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such supply less the value of transfer of land or undivided share of land, as the case may be, and the value of such transfer 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 this paragraph, 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 including by way of lease or sublease. 14. In para 2 of Notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended vide Notification No. 1/2018-C.T. (Rate), dated 25-1-2018, there is deemed provisions that the va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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