Page 115 - GSTL_16th July 2020_Vol. 38_Part 3

2020 ] IN RE : DIPESH ANILKUMAR NAIK 353
Discussion & findings
6. We have considered the submissions made by the applicant in their
application for advance ruling as well as at the time of personal hearing.
7. In this case, a moot point is to be decided as to whether GST is appli-
cable on sale of plot of land for which, as per the requirement of approved by the
respective authority (i.e. Jilla Panchayat), Primary amenities such as, Drainage
line, Water line, Electricity line, Land levelling etc. are to be provided by the ap-
plicant?
8. Coming to GST, tax is levied on supply of goods/services. Schedule-
III to GST Law sets out the activities or transactions which are treated as neither a
supply of goods nor as supply of services. Therein entry 5 covers sale of land,
which is excluded from GST levy.
8.1 For the sake of understanding, the relevant provisions are repro-
duced herein below :
Serial Number 5 to Schedule III of the CGST Act :
“5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale
of building.”
9. From the above definition, it is clear that the transaction shall be out
of GST net only if the activity is exclusively dealing with transfer of title or trans-
fer of ownership of land, which is immovable property or earth. Here the sub-
stance of agreement between the parties is important. Where the nature of activi-
ty is that of ONLY sale of immovable property of plot, it is excluded from GST
levy.
10. As per the applicant, he is the owner of the land, who develops the
land with an infrastructure such as Drainage line, Water line, Electricity line,
Land levelling etc. as per the requirement of the approved Plan Passing Authori-
ty (i.e. Jilla Panchayat). After this development of the land, he will not do any
building constructions and all. He sales only developed land as plots.
11. We find that the plotted development is a scheme which involves
forming land into layout after obtaining necessary plan approval from the De-
velopment Authority, get all other permission required to take up, commence
and complete what would be the layout, comprised of individual sites. In the
activity of plot development, the following are done-levelling the land, construc-
tion of boundary wall, construction of roads, laying of underground cables and
water pipelines, laying of underground sewerage lines with sewer treatments
plant, development of landscaped gardens, drainage system, water harvesting
system, demarcation of individual plots, construction of overhead tanks, other
infrastructure works. Further common amenities like garden, community hall,
etc. are also offered in some schemes. Sale of such sites is done to end customers
who may construct houses/villas in the plots.
11.1 The sellers charge the rates on super built-up basis and not the ac-
tual measure of the plot. The super built-up area includes the area used for
common amenities, roads, water tank and other infrastructure on a proportionate
basis. Thus, in effect the seller is collecting charges towards the land as well as
the common amenities, roads, water tank and other infrastructure on a propor-

GST LAW TIMES  16th July 2020  115