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TMI Blog2024 (1) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... that sale of land/ developed land is also sale of land and is covered by Sr. No. 5 of Schedule Ill of the Central Goods and Services Tax Act, 2017 and accordingly does not attract GST. The Applicant has developed the land for the project at the behest of the buyer(s). The development of land undertaken by the Applicant is an activity preceding and in relation to construction of project, as evident from the Memorandum of Agreement Power of Attorney both dated 27.02.2019. Here, the project means the building and the land appurtenant thereto and all passages, the parking space, amenities thereto etc as provided in BDA plan. he Applicant has relied upon Ruling of Haryana AAR in case of M/s Informage Realty Private Limited [ 2018 (10) TMI 1868 - AUTHORITY FOR ADVANCE RULING, HARYANA] , in case of M/s Shantilal Real Estate Services [ 2022 (1) TMI 659 - AUTHORITY FOR ADVANCE RULING, GOA] and in case of of M/s Rabia Khanum [ 2022 (9) TMI 785 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA] . Wherein it has been held that sale of plots/developed plots is not taxable in terms of Entry 5 of Schedule III. In this regard, it is stated that the ratio of the rulings on the cases cited by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST Act and the OGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OGST Act. 2.0 Submission of the Applicant 2.1 The Applicant is engaged in the business of Real Estate Construction, being incorporated in the year 2018 in the name and style of M/s NBER DEVELOPERS LLP. The firm has started a project of land plotting at Jatni, Odisha. The firm further intends to construct duplex houses for the customers on the same land. The firm is going to enter into two separate agreements with its customers; for sale of land (residential) and for construction of duplex over the same land. It has been submitted that the duplexes are not affordable residential apartment . 2.2 It has been submitted that following rates revision for construction of residential apartments finalized in 34th GST Council meeting dated 19.03.19 and notified vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019, applicable from 01.04.2019 making amendments against serial number 3, for item (i) of Notification No. 11/2017- Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by Sr. 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 leveling, laying of drainage lines (as may be received by developers) shall attract GST at applicable rate for such services. 2.5 The Applicant is of the view that both the contracts should be dealt separately. Once the customer enters into a contract for purchase/sale of land and land is registered in his name, the customer becomes the owner of the land and he has no obligation/bindings to get his house constructed from the same developer. Separate approval needs to be taken from concerned authorities for construction of individual houses. When a developer starts development of a land into plotting and other development activities like electricity, drainage, water facilities, parks, club house etc., he may enter into sale agreements with the prospective buyers either before commencement of such development or during the course of such development or after development is completed. Circular 177 cited above, clarifies that ''As per S.No. (5) of Schedule III of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Applicant, through its representative Shri Nikhil Tekariwal, AR appeared for personal hearing. Shri Tekariwal re-iterated the submissions already furnished in the application filed for advance ruling. The Revenue has neither submitted its comments nor appeared for personal hearing. 3.1 During personal hearing, the Applicant was asked to submit copies of the documents submitted to RERA and copy of approval, copies of registered power of attorney and JDA with the land owners, draft agreement/final agreement with the plot owners for sale of land/ construction and copy of LLP deed. On receipt of the said documents, a fresh date for P.H. would be considered. Accordingly, a fresh date of personal hearing was fixed on 01.12.2023. The applicant (AR) submitted the required documents on the said date and appeared for P.H. Discussion findings 4.0 We have gone through the advance ruling application, question on which advance ruling has been sought and the Applicant's interpretation of law and/or facts, as the case may be, in respect of the question asked. We find that the question before us essentially pertains to GST rate on sale of Land and construction of Duplex on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the works executed. 4.4 It is seen from the records/documents that Arnav Constructions a partnership firm having its office at Bhabagrahi Lane, Rajabagicha. Dist- Cuttack, PIN- 753009 bearing PAN No AAQFAI880L. the owner of the land in question covered under Khata No 106, Plot No 343 Area A.c. 5.180 dec. Plot No 343/367 area- A.c. 0.060 dec situated in Mauza- Gora. Dharmasagar. P.S. Jatani, Dist - Khurda has executed a General Power of Attorney in favour of NBER Developers, represented through its designated partner Mr. Chetan Kumar Tekariwal for commercial exploitation of the land in question. The relevant clauses of the Power of Attorney is reproduced below.- NBER, Developers (a) To submit applications affidavit, indemnity bond, rent receipts etc. along with the other requirements as well as complete other formalities prescribed by the Authorities, in this regard. b. To get the building plans including revised plans prepared through qualified Architects for construction of the Multi Storied Building complex/independent duplex comprising of Units/Flats/Duplex Houses/Parking spaces and to submit the same before the Concerned Development Authority or any other Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary. j. To insert advertisements in any local and national daily News Papers offering for sale of Flats / Units/independent duplex houses in the proposed building complex of the total built up areas /flats /Duplex houses at its cost and expenses. k. To take all steps in arty' legal proceedings and/or litigations that may arise during the period of construction including engaging any Advocate / Solicitor. l. To appear before any Courts and/or any Office for obtaining copies of any documents and papers relating to the schedule property. m. To apply for inspection and/or to inspect the judicial/revenue records. n. To accept service of summons, notices to writ to be issued by any Court or authority concerning or arising out of construction of the Housing Complex on the said land. o. To appear before any Registrar of Assurances, other Officer(s), Authorities having jurisdiction to entertain and receive the conveyance for registration and execute and register sale deeds, conveyances, instruments transferring Flats / Units together with proportionate impartible undivided share in the land in favour of intending owners of such Units of Super built up are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Memorandum of Agreement Power of Attorney, it is crystal clear that the land owner M/s Arnav Constructions has not authorized the Applicant to sale land/plot; rather to construct Duplex /Multi Stories buildings over the land in question. 4.6 However, the Applicant has entered into two separate agreements with its customers, one for sale of land (residential) and the other for construction of duplex/multi storied building over the same Land. For this purpose, the Applicant has obtained the final layout approval plan for the project from BDA. The Applicant has also registered the said project under the provisions of the Act with RERA, Bhubaneswar, separately i.e. Apartment Project as Neeladri Ark on dated 04.08.2021 under regdn no. RP/19/2021/00523 and for plotted scheme Neeladri Ark, Phase-II on 18.112021 under regd no. RP/19/2021/00603. in accordance with the terms and conditions set out in the agreement and as mutually agreed upon by and between the Applicant its customers, the Applicant hereby agrees to sell and the customers agree to purchase the plot, undivided interest in the common areas. From the Agreement for Sale (draft agreement furnished), it is observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of project, as evident from the Memorandum of Agreement Power of Attorney both dated 27.02.2019. Here, the project means the building and the land appurtenant thereto and all passages, the parking space, amenities thereto etc as provided in BDA plan. 4.8 As per Clause 1.8 (iii) of the ''Agreement for sale (draft), the computation of the price of the land includes recovery of price of land, construction of common areas, internal development charges, external development charges, taxes, cost of providing electric wiring, electrical connectivity to the plot, water line, fire detection equipment in the common areas and includes cost for providing all other facilities, amenities and specifications to be provided within the plot and project which evidences that the Applicant cum-developer is collecting charges for land and services on a proportionate basis and all these are intrinsic part of the plot allotted to the buyer and such transactions are not intended for the sale of land rather towards construction of project (duplex/multi storied building) which amounts to rendering taxable supplies. Hence, the impugned transaction attracts GST in view of the Schedule II, Par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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