About Gyan | Oct 22, 2021 | 0
GST on Property: GST will be levied on the development deal, not on the sale of the plot
Indore (AboutGyan Representative), GST on Property. There was a doubt about the provisions of service tax in real estate, now the situation is being created on the provisions of GST. Chairman CA Manoj Gupta said this at an online seminar of Tax Practitioners Association (TPA) Indore. He said, GST Council should clear the confusion about GST on construction in real estate. There is confusion from earlier rules and then advance ruling. In the online seminar, CA Dr. Arvind Chawla explained the aspects of plot development and joint development agreement ie GST in the context of GST. He said, there is a legal difference between land and plot. There is no tax on selling the plot only, but if the owner of the plot sold it to another person by signing a development agreement, then GST will be levied on the dealings between the developer (developer) and the plot owner.
Regarding the various popular forms of shared development between the developer and the landowner, such as the distribution of plot or receipts, Dr. Chawla said that the developer will have to pay GST at the rate of 18 percent on the share received. From this, he will be able to take the exemption of tax paid on the expenditure incurred during development. While discussing the decisions of various advance ruling authorities of the country, he said that they are bound only on the applicant and his appearance. Only guidance can be taken from them, it would be a mistake to regard them as equivalent to the decision of the court.