Levy of GST— In the instant case, the applicant is an individual and is not registered under GST. The Applicant intends to convert their land into residential sites.

The applicant has sought advance ruling in respect of the following questions:

i. Whether GST is applicable for the consideration received on sale of sites? If yes, at what rate and on what value?

ii. Whether GST is applicable for the advance received towards sale of site? If yes, at what rate and on what value?

iii. Whether GST is applicable on sale of plots after completion of works related to basic necessities?

iv. If GST is chargeable on any of these transactions, can the applicant collect the GST from the prospective buyers?

v. If GST is chargeable on any of these transactions whether the applicant is eligible for claiming Input Tax Credit that they pay on the expenses they incur on development?

The development of land includes formation of roads, formation of rain water drains, laying of electricity cables, water pipes, sewerage lines, drilling of borewells for supply of water, construction of water tank for storage and supply of water, setting up of a power sub-station and obtaining connection from Electricity board for supply of electricity etc, which are basically required for human inhabitation. Without providing these basic necessities, the concerned authorities will not grant permission to sell the plots to individuals for construction of houses.

CBIC has clarified that land may be sold either as it is or after some development such as levelling, laying down of drainage lines, water lines, electricity lines and sale of such developed land is also sale of land and is covered by Sr. No. 5 of Schedule III of the Central Goods and Services Tax Act, 2017 and accordingly does not attract GST.

Held that— 

i. GST is not applicable for the consideration received on sale of site.

ii. GST is not applicable for the advance received towards sale of site.

iii. GST is not applicable on sale of plots/ sites even when they are sold after completion of works related to basic necessities

iv. In view of the ruling given at question (i), this question becomes redundant.

v. In view of the ruling given at question (i), this question becomes redundant.