GST will be levied on sale of land for which primary amenities – such as drainage, waterline and electricity – have been provided by real estate developer, the Authority for Advance Ruling (AAR) has said. The AAR has also concluded that sale of developed plots will be covered under the clause ‘construction of a complex intended for sale to a buyer’ and accordingly GST would be levied.
An applicant had approached the Gujarat bench of AAR on whether Goods and Services Tax (GST) is applicable on sale of plot of land for which, as per the requirement of approved by the respective authority (i.e. Jila Panchayat), primary amenities such as, drainage line, water line, electricity line, land levelling etc are to be provided by the applicant.
“We find that the activity of the sale of developed plots would be covered under the clause ‘construction of a complex intended for sale to a buyer’. Thus, the said activity is covered under ‘construction services’ and GST is payable on the sale of developed plots…,” the AAR said.
The AAR, while passing the ruling, said that the applicant sells the developed land as plots and the sale price includes cost of land, as well as price of amenities on a proportionate basis.