The authority for Advance Ruling in a major step has said that now buying land or plots that have primary facilities of drainage, electricity will have GST implications. "GST will be levied on sale of land for which primary amenities - such as drainage, waterline and electricity - have been provided by real estate developer", said the AAR.
Also, the AAR said sale of developed plots will now be part of 'construction of a complex intended for sale to a buyer' and accordingly GST would apply.
Notably, an applicant reached out to the Gujarat bench of AAR to understand whether GST applies to sale of plot of land for which, as per the requirement of approved by the respective authority (i.e. Jila Panchayat), primary amenities such as, drainage line, water line, electricity line, land levelling etc are to be provided by the applicant.
"We find that the activity of the sale of developed plots would be covered under the clause 'construction of a complex intended for sale to a buyer'. Thus, the said activity is covered under 'construction services' and GST is payable on the sale of developed plots...," the AAR said.
Also at the same time, the AAR on making the decision said that the applicant sells the developed land as plots and the sale price is inclusive of land cost plus price of amenities on a proportionate basis.