Activities or Transaction Excluded from Supply - Para 5 of Schedule III [Read with Section 7(2)] - GST Ready Reckoner - GST

Activities or Transaction which shall be treated neither as supply of goods nor as supply of services - Schedule III As per Section 7(2) , There are exception of supply, Schedule III to the CGST Act, 2017 provides the Activities or transaction which shall be treated as neither supply of goods nor supply of services (in other words, exclude from the supply) Para 5 - Sale of land and, subject to clause (b) of paragraph 5 of Schedule II , sale of building. Sale of land is neither supply of goods nor a supply of services as per para 5 of schedule III of CGST Act. sale of building where the entire consideration has been received after completion certificate is issued or after its first occupation, whichever is earlier- not treated as supply under GST. sale of building where the entire/ part thereof consideration has been received before completion certificate is issued or after its first occupation, whichever is earlier- treated as supply under GST. Sale of developed plots , its contented that it sold land, hence not a supply in terms of entry no. 5 of schedule III. Exception rental, leasing licensing of land building - treated as supply under GST. Important Notifications clarifications Whether sale of land after levelling, laying down of drainage lines etc., is taxable under GST . [ Circular No. 177/09/2022-TRU Dated 03.08.2022 ] 14.3 Land may be sold either as it is or after some development such as levelling, laying down of drainage lines, water lines, electricity lines, etc. It is clarified that sale of such developed land is also sale of land and is covered by Sr. No. 5 of Schedule III of the Central Goods and Services Tax Act, 2017 and accordingly does not attract GST. 14.4 However, it may be noted that any service provided for development of land, like levelling, laying of drainage lines (as may be received by developers) shall attract GST at applicable rate for such services. Issue related to taxability of tenancy rights under GST [ Circular No. 44/18/2018-CGST Dated 02.05.2018 ] 4. The transfer of tenancy rights cannot be treated as sale of land or building declared as neither a supply of goods nor of services in para 5 of Schedule III to CGST Act, 2017 . Case Law M/S. Kedaram Trade Centre ( 2023 (4) TMI 300 - AAR, GUJARAT ) Held that The lease of plot for 90 years by the applicant is not sale of land but is a lease and therefore, does not fall within the ambit of clause 5 of Schedule III of CGST Act, 2017. Hence, it is concluded that this activity i.e. lease of commercial units on payment of one time lease premium and annual premium is a supply falling within the ambit of section 7(1) of CGST Act, 2017 would be leviable to tax at the rate of 18% (i.e. 9% CGST and 9% SGST) in terms of notification No. 11/2017-CT(Rate) dated 28.6.2017.