|Where applicant acquired large parcel of land and proposing to subdivide it into smaller plots through some value addition work such as roads, poles or drainage, sale of plots will not amount to supply
The applicability of GST on developers in to the business of plotting is matter of litigation since the inception of the GST.
Whether the Sale of plots of land is a Supply under GST so as to levy the GST? This was the issue before AAR, Goa in the case discussed herunder: AUTHORITY FOR
ADVANCE RULINGS, GOA
Shantilal Real Estate Services, In re
 136 337 (AAR – GOA)
In this case, the Applicant acquired large parcel of land.
Land will be converted into smaller plots through some value addition work such as roads, poles or drainages.
On the issue of applicability of GST, AAR held as under:
Amenities such as roads, poles, or drainages constructed by applicant on parcels of land will be available for use to every plot holder without any title to it.
No plot owner or collectively all plot owners will be in a position to sell these poles, roads or drainages nor they will be in a position to sell only plots without having these poles, roads or drainages on it.
So object for sale is land – Principal transaction is sale of land and these amenities are a natural part of sale of plot of land and these do not in any way change nature of land or of transaction or activity being that sale of land.
As per entry 5 of Schedule III of Central Goods and Services Tax Act, 2017, sale of land is activity or transaction which shall be treated neither as a supply of goods nor a supply of services.
Thus, sale of plots will not amount to supply [Section 7 of Central Goods and Services Tax Act, 2017/Goa Goods and Services Tax Act, 2017]