Sale of LAND - GST

[Ethirajan Parthasarathy]

A dealer sells factory land for 2 crores. To my understanding, this sum of ₹ 2 crores need not be considered for arriving at "Aggregate Turnover" and also need not be reflected anywhere in GSTR 3B or GSTR 1, since sale of land is not a supply at all as per Schedule III of GST Law.

Please confirm.

[KASTURI SETHI]

I agree with you. Although there is a column for non-GST Outward Supply in both returns, yet it is not to be shown/filled in. Such value cannot shown against taxable supply or exempt supply. Such sale is out of definition/scope of supply provided in CGST Act.

[Alkesh Jani]

Shri

GST is mainly based on accounting standards and returns are designed in such manner. If you show the amount in Non-GST column it will tally with returns and books of account. If not shown, as there is no revenue loss, no adverse view can be taken by the department in future.

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

When we talk of non-GST supply, why such sale/outward supply should be reflected in GSTR-3 B or GSTR-1 return ? It is out of jurisdiction of GST. It is not an issue of exempt or nil supply.

I think the purpose for creating the column of Non-GST supply in GST returns is that the Department intends to ascertain whether the registered person has correctly claimed such supply as non-GST supply. I have observed that the assessees often commit such mistakes. There are examples to this effect.

I agree with you that being no revenue loss in the event of non-filling in this column, penal action is not apprehended.

[Alkesh Jani]

Shri Kasturiji Sir,

I have already mentioned that the returns are designed as per Accounting Standards, so if you might have noticed that for the year 2019-20, FORM 26AS of ITR value of GSTR-3B is given and all the returns are inter linked. When there is a sale of land if it is shown as Non-GST in GSTR-3B, and other income or capital gain as the case may be, in ITR, it will be found to be tallied than no clarification either from GST or IT department may be initiated and even if initiated, one can present both the returns in their favour as documentary proof of value declared.

Further, as there is no revenue loss, one is at the safe point, if clarification is called for, if shown in GSTR returns.

Thanks

With due regards

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

You are absolutely right. Thanks for your viewpoint.

AI Summary

Sale of land outside GST scope: such proceeds need not be treated as taxable supplies but may be disclosed to reconcile returns.
Sale of land used as a factory is outside the scope of supply under Schedule III and therefore not a taxable supply; such proceeds need not be included in aggregate turnover or reported as taxable or exempt outward supplies in GSTR-1 or GSTR-3B. A return column exists for non-GST outward supplies: one approach is not to report non-GST sales as they lie outside GST jurisdiction; another pragmatic approach is to report them to reconcile GST returns with income tax filings and accounting records to avoid departmental queries.