Developed land sale remains outside GST where planning-mandated works are incidental to transfer of title, not a separate service.

Sale of developed sites remains outside GST where the landowner carries out development works mandated by planning law before transfer, because the buyer pays for title in the plot and not for a separate development service. The development infrastructure vests with the local or planning authority and is not transferred to the purchaser, so the transaction continues to be treated as sale of land under Schedule III. Advances received towards such site sales are also not taxable on this footing. Services procured from third parties for development may be taxable in the hands of the owner, but that does not convert the land sale into a taxable supply.

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Issues: Whether consideration received, advances received, and sale of plots after development of land are liable to GST when the landowner undertakes development works mandated by planning before release of sites for sale.

Analysis: The plotted development was undertaken under the Karnataka Town and Country Planning Act, 1961, which requires relinquishment of common areas, completion of development works, and issuance of a final layout plan before the sites can be transferred. The development infrastructure remains with the local authority or planning authority and is not transferred to the purchaser. The consideration paid by the buyer is therefore for transfer of title in the plot, not for a separate development service. The Board's clarification on developed land was applied to hold that sale of land, whether developed or undeveloped, remains outside GST under Schedule III. The distinction from apartment construction was accepted because the development activity here is incidental to sale of land and not a service rendered to the buyer. Services procured by the owner from third parties for development remain taxable, but that does not convert the land sale into a taxable supply.

Conclusion: GST is not payable on the consideration received for sale of sites, on advances received towards such sale, or on sale of plots after completion of the mandated development works; the appeal was therefore rejected and the ruling of the lower authority was upheld.

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