The actual GST rate for housing under construction, real estate or commercial real estate is 18%. However, 1/3 out of 18% is considered the value of the land or the total share of the land made available to the buyer of the property. Thus, the rate will be 12% with the full ITC. The AAR found that the taxpayer`s primary jurisdiction lies in the conversion of raw land into a well-developed residential complex and not in the sale of land. Activities include surveying the country, establishing a detailed map of the proposed layout, evacuating/leveling the site, carrying out road construction, designing and creating common amenities, etc. The activity of selling the land is ancillary to the main activity of land development. In addition, several provisions of the agreement indicate that the taxable person has no right to the land and therefore does not participate in the sale of land in accordance with entry 5 of List III of the CGST Law. The development costs were borne by the taxpayer. The taxpayer also entered into an agreement with the customers for the sale of built-up land for remuneration. The taxpayer asked for a preliminary ruling whether: the Government itself specified, in the communication of sentences, that the value of the land corresponded to only 1/3 of the total value. Therefore, the initial rates of 18%/12% before 01.04.2019 and the new sentences w.e.f. 01.04.2019 Reduction of 1.5%/7.5% at the effective rate of 12%/8% and 1%/5%, i.e.
after 1/3. This standard deduction applies to all cities throughout the country, regardless of the actual price of land applicable in any locality. But in real life, the position is completely different. The value of land is not the same throughout the country. It varies from place to place….