GST Ruling: Tax on Sale of Developed Land, Works Contracts

The ruling clarified that selling developed land with structures is taxable under GST, while selling undeveloped land is exempt. Works contracts involving property transfer for consideration are taxable, but if these elements are absent, the transaction is not taxable. The application by a private limited company was disposed of accordingly.

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Issues:
1. Whether the disposal of developed plots of land to allottee members falls under GST.
2. Whether infrastructure development undertaken by the applicant qualifies as a "supply" under GST.

Analysis:

Issue 1:
The applicant, a private limited company, sought clarification on whether selling developed land to allottee members is subject to GST. The company, formed by industrialists, received land from TSIIC for industrial development. The sale agreement with TSIIC is conditional upon completing infrastructure development before transferring the title to individual industrialists. The applicant argued that the sale of land should be exempt from GST as per Schedule III of the CGST Act, which includes the sale of land as exempt unless sold with a constructed complex. The ruling stated that selling land without development is exempt, but if a civil structure is erected, it is taxable under CGST/SGST Acts.

Issue 2:
Regarding infrastructure development, the applicant's activities were examined in detail. The agreement with TSIIC involved transferring land only after infrastructure development completion. The ruling clarified that for a transaction to be considered a works contract under CGST Act, certain conditions must be met, including property transfer, consideration, and execution as per a contract. The ruling found that the applicant's agreement with TSIIC did not fulfill these conditions. Similarly, the agreement with an individual industrialist did not meet the criteria for a works contract. It was highlighted that any development works post-sale deed registration would be considered a works contract and subject to tax.

In conclusion, the ruling stated that selling developed land with structures is taxable under GST, while selling undeveloped land is exempt. Additionally, works contracts involving property transfer for consideration are taxable, but if these elements are absent, the transaction is not taxable. The application by M/s. TIF Integrated Industrial Parks Pvt. Ltd. was disposed of accordingly.

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