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2022 (11) TMI 1183 - HC - GSTLevy of GST upon the sale consideration for purchase of developed land upon the petitioners who happen to be purchasers of the said land from Bhopal Development Authority - HELD THAT - In view of the Court circular dated 03.08.2022 issued by Government of India, Ministry of Finance, Department of Revenue issued by the Government of India, Ministry of Finance, Department of Revenue, it would be appropriate that the Bhopal Development Authority applies its mind again on the question as to whether GST deserves to be levied in given facts and circumstances or not. This petition is disposed of with direction to the Bhopal Development Authority to reconsider the question of levy of GST on the sale of developed plots to the petitioners in the light of aforesaid circular dated 03.08.2022 issued by Government of India, Ministry of Finance, Department of Revenue.
Issues:
Challenge to land allotment notices levying GST on sale of developed land. Analysis: The petition filed under Article 226 challenges land allotment notices dated 23-11-2021 and 09.12.2021, imposing GST @ 12% on the sale consideration for purchase of developed land by the petitioners from Bhopal Development Authority. During the proceedings, a circular dated 03.08.2022 issued by the Government of India, Ministry of Finance, Department of Revenue was brought to the court's attention. The circular clarifies that the sale of developed land, including land after levelling, laying down of drainage lines, etc., falls under Schedule III of the Central Goods and Services Tax Act, 2017, and is not subject to GST. However, services provided for land development are taxable under GST. Consequently, the court directed the Bhopal Development Authority to reconsider the levy of GST on the sale of developed plots to the petitioners in light of the circular. The authority was instructed to complete this review within 60 days from the date of receiving the court's order. The court's decision was based on the clarification provided in the circular, emphasizing that the sale of developed land is covered under Schedule III of the CGST Act, 2017, and does not attract GST. The court directed the Bhopal Development Authority to independently assess the applicability of GST on the sale of developed plots to the petitioners, disregarding the previous land allotment notices. This directive aims to ensure that the authority reconsiders the GST levy in accordance with the legal provisions and the recent clarification from the Ministry of Finance, Department of Revenue. The court's intervention seeks to uphold the correct application of GST laws and prevent any erroneous imposition of taxes on the sale of developed land.
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