BUINESS OF SITE FORMATION AND SALE- IS LIABLE FOR REGISTRATION UNDER GST?

[KERAGODEGOPALARAO ANANTHARAO]

LAND DEVELOPER IS A PARTNERSHIP FIRM, OWNING A LAND ON WHICH SITES ARE TO BE FORMED AND SOLD TO THE PERSPECTIVE CUSTOMERS. FORMATION OF SITES LIKE LEVELING OF LAND, FORMATION OF ROADS, BRIDGES, PARK AND OTHER AMENITIES AS PER MUDA IS ENTRUSTED TO A CONTRACTOR WHO IS MANAGING PARTNER OF THE FIRM, AND FIRM IS NOT PURCHASING ANY MATERIAL FOR DEVELOPMENT,CONTRACTOR IS FULLY RESPONSIBLE FOR HANDOVER SITES FIT FOR REGISTRATION TO PROSPESPECTIVE CUSTOMERS.THE FIRM OBTAINED RERA PERMISSION.

IN THIS SITUATION: IS IT COMPULSORY FOR THE FIRM TO GET REGISTRATION UNDER GST

[YAGAY andSUN]

In our view it is a taxable service under the provision of GST Laws and registration will depend on the crossing of threshold limit as prescribed in GST Law i.e. 40 lakhs.

[KASTURI SETHI]

In my view, in this scenario registration is compulsory. Go through Section 24 (vii) of CGST Act which is extracted below:-

SECTION 24. Compulsory registration in certain cases

(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise

[KASTURI SETHI]

Pl. also go through HSN 995432.

[Rajagopalan Ranganathan]

Sir,

In my opinion the threshold limit is ₹ 20 lakhs only since work done is service.

[KASTURI SETHI]

Registration is compulsory for contractor because he works for and on behalf of an other person. Developer firm is required to take registration only after crossing threshold exemption limit of ₹ 20 lakhs, being service provider.

[YAGAY andSUN]

My mistake, the threshold is ₹ 20L.

AI Summary

Compulsory registration where services are supplied on behalf of another, making site-development contractors liable to register. Activity of forming and selling developed sites qualifies as a taxable service under GST. Persons who make taxable supplies on behalf of others fall under the statutory compulsory registration provision (Section 24(vii)), making the contractor performing site-development liable to register irrespective of threshold. The developer firm must register only if it crosses the service-supplier threshold exemption.