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GST on transfer of Leasehold land which includes other services such as Electricity Line, Water Line, Drainage Line, Road, Sewerage Line etc. like in case of plotted development.

Levy of GST— In the instant case, the applicant is engaged in the allotment of land (Plots) on Leasehold (99 Years)/ Freehold (Residential) basis to eligible bidders through e-auction process for institutional, Residential. Commercial, Public & Semi Public and Mix use as per terms and conditions specified in Jharkhand Smart Cities Land and Other Fixed Assets (Utilization. Allotment and Disposal) Rules, 2019, as amended. The Leasehold is either one time transfer for 99 years on lease or on Annual Lease Rent. The Freehold basis is Freehold sale, i.e., Transfer of ownership.

The applicant have sought for Advance Ruling in respect of the following questions:-

(i) Applicability of GST on transfer of Leasehold land which includes other services such as Electricity Line, Water Line, Drainage Line, Road, Sewerage Line etc. like in case of plotted development.

(ii) Applicability of GST on transfer of ownership of Freehold land which includes other services such as Electricity Line, Water Line, Drainage Line, Road, Sewerage Line etc. like in case of plotted development.

(iii) Applicability of GST on Annual Lease Rent

(iv) Applicability of GST Rate on the above cases

(v) Whether they as a service provider can claim ITC on their inward goods and services.

The basic question in the instant case is whether the sale of plot after carrying out certain development activities or providing different amenities is sale of land or supply of something other than land.

Held that—

The leasing of property by RSCCL, if covered under the provisions of Notification No. 12/2017-Central Tax (R) dated 28.06.2017, is exempted from the tax. In other cases, the leasing of property by RSCCL is taxable supply of service.

The activity of the applicant appears absolute sale of land. Hence, the consideration received by RSCCL against transfer of ownership of Freehold land, i.e., sale of land is not taxable.

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