The order by the Karnataka AAR follows a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) on August 3, 2022, which said plot sale does not attract GST even if some basic infrastructure has been developed. Recall here that GST is not applicable on land sale. However, it is applicable on property sale under works contracts. Get to know all about E Swathu
That notwithstanding, some authorities had taken a contrarian view of this established provision in the past.
In July this year, for instance, the Madhya Pradesh AAR ruled that sale and purchase of land after the start of development activities will attract GST while giving its order in a case pertaining to Bhopal Smart City Development Corporation Ltd.
“The activity of purchase or allotment of land and selling the said land after undertaking development activities of providing amenities such as drainage line, water line, electricity line, land levelling, and common facilities, viz., road and streetlight, etc., is liable to GST. The activities of the respondent, M/s Bhopal Smart City Development Corporation Limited will fall under the clause (b) of paragraph 5 of Schedule -II of Madhya Pradesh Goods and Services Tax Act and Central Goods and Services Tax Act,” the MP AAR order said.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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