TMI Blog2020 (10) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 97(2) of the Act, the present application is admitted. Whether the activity of development and sale of land is taxable under GST or otherwise? Ruling as per Amit Gupta, Member:- HELD THAT:- In the present case since there is no construction of any civil structure on the developed plot by the applicant there is no need of completion certificate by the applicant. For the area as a whole there will be development activities as per local bye laws but the same is not a part of sale to the end customer. There is absolutely no provision of completion certificate by any competent authority in respect of sale of land - there is no contractual relationship between the applicant and the end customer. In paragraph 5 (b) of schedule H there is intention for sale to buyer and therefore there is agreement between the parties. In the present case the entire consideration is to be received at the time of sale deed for the sale of land upon payment of applicable stamp duty. So, the sale of developed plot cannot fall under paragraph 5(b) of schedule II - since the sale of developed plot does not constitute supply of goods or services, there is no question of tax (CGST/SGST) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst question is yes, what will be the taxable value of the supply stated in first question; d. If the answer to the first question is yes, will ITC be admissible. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 3. As per the said subsection (2) of Section 97 of the Act advance ruling can be sought by an applicant in respect of : (a) Classification of any goods or services or both (b) Applicability of a notification issued under the provisions of this Act, (c) Determination of time and value of supply of goods or services or both, (d)Admissibility of input tax credit of tax paid or deemed to have been paid (e) Determination of the liability to pay tax on any goods or services or both (f) Whether the applicant is required to be registered (g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led with the sale of land, thus the same is fall in the ambit of entry no. 5 of Schedule III appended to the Act. As regards to the value aspect of said supply, the applicant stated that the provisions of Rule 27 to 30 do not apply to the transaction, therefore the value shall be determined as per 31 of Rules. They also stated that in case the activity is taxable, thus they are entitled for ITC in terms of Section 16 (1) of the Act and if in case the said supply is classified as `works contract service , the ITC still available to them. 7. Admissibility of the Application : The concerned officer has given the order of Maharashtra AAR in the case of Saint Gobain India (P) Ltd (Order No GST ARA - 51/2019-20/B-38 dated 17.03.2020). She has raised the objection regarding admissibility of the application in the present case. The applicant has submitted written submission in this regard whereby he has brought our attention to Section 95 of CGST Act, 2017 and the same is reproduced below--- 95. In this Chapter, unless the context otherwise requires,- (a) advance ruling means a decision provided by the Authority or the Appellate Authority 1 for the National Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before further discussing this Advance Ruling System, we can unhesitatingly say that, at least, for CPSEs and Government authorities, there would be no question of taking this matter further once an Advance Ruling is delivered, and even in case of private persons, the scope of any further challenge is completely narrowed down. Therefore, in terms of Section 97(2) of the Act, the present application is admitted. 8. Now coming to the issue whether the activity of development and sale of land is taxable under GST or otherwise. In this context, on going through the legal provisions submissions made by the applicant, we have different views in this matter and are discuss as under: (A) [Ruling per: Amit Gupta, Member]: I find that the applicant is planning to purchase land and develop it with infrastructure by levelling of land, demarking Plots, Constructing Road, building drainage line, installing water line, erection of electricity line etc. as per the requirement of the approved Plan Passing Authority and sell units of the purchased land as plots to the customers. I find that the applicant has given his written submission whereby he has given that as per RERA, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below: SCHEDULE II ACTIVITIES [OR TRANSACTIONS] TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 1.----- 5. Supply of services The following shall be treated as supply of services, namely: - (a) renting of immovable property; (b) construction of a complex, building, civil structure or a part thereof including a complex or building 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. Explanation .-For the purposes of this clause- (1) the expression competent authority means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. After the development of land, the applicant is going to make sale deed in favor of end customers which may construct houses/ villas etc. on that piece of land. I find that the land which is going to be sold does not have complex, civil structure, building or a part thereof. The entire activity which has been undertaken by the applicant is for the development of that area so that plots can be demarcated and sold. The entire activity is done to make the area livable and provide basic facilities to the future residents. Moreover, as per paragraph 5(b) of Schedule II, the tax will not be charged when the consideration is received after the completion certificate is issued by the competent authority. In the present case since there is no construction of any civil structure on the developed plot by the applicant there is no need of completion certificate by the applicant. For the area as a whole there will be development activities as per local bye laws but the same is not a part of sale to the end customer. There is absolutely no provision of completion certificate by any competent authority in respect of sale of land. I further find that there is no contractual relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no tax on the sale of land. (B) [Ruling per: Shri Anurag Mishra, Member]- I find that the applicant is planning to purchase land and develop it with infrastructure by levelling of land, demarking Plots, Constructing Road, building drainage line, installing water line, erection of electricity line etc, as per the requirement of the approved Plan Passing Authority and sell units of the purchased land as plots to the customers. I observe that plot development is a scheme which involves developing a land layout after obtaining necessary approval from the development authority and subsequent sale of such sites. Generally, the sellers of plots of land charge the property rates based on the built-up and not the basis of the actual measure of the plot. A super built-up area comprises such area utilized for providing common amenities like infrastructure facilities like roads, water tanks, etc. on a proportionate basis, which means in addition to the land the seller charges a price for such other amenities included. Thus, the sale of land is not equivalent to the sale of a developed plot and is a completely different transaction. The applicant, is the owner of the land who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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