No GST Ruling Issued on Plot Sale and Related Charges After Withdrawal of Application

Background of the Advance Ruling Application

M/s. Godrej Properties Limited approached the Maharashtra Authority for Advance Ruling (AAR) by filing an application under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017. The assessee sought clarity on the Goods and Services Tax (GST) implications on various elements connected with sale of plots and ancillary charges.

The proceedings were registered as NO.GST-ARA-97/2022-23/B-12, based on Online ARA Application dated 23.12.2022, and pertained to proposed transactions and recoveries in relation to immovable property and certain goods classification.

Issues on Which Ruling Was Sought

The assessee had placed multiple questions before the Authority, intending to obtain advance certainty on GST treatment. The queries broadly covered:

  1. GST on sale of plots
    Whether sale of plot of land, as contemplated in their business model, would attract levy of GST.

  2. GST on basic infrastructure development charges prescribed by NMRDA
    The assessee proposed to recover amounts towards basic infrastructure facilities mandated by NMRDA, including but not limited to:

    • Drainage systems
    • Water pipeline networks
      These charges were referred to in Table 2 of Annexure E of the agreement. A specific ruling was sought on whether such recoveries would be subject to GST.

  3. GST on common recreational amenities/facilities development charges
    The assessee would also collect charges towards common recreational amenities and facilities, as specified in Table 1 of Annexure E of the agreement. Clarification was requested on whether such amounts would qualify as taxable supplies under GST.

  4. Taxability where booking and agreements occur after receiving Grampanchayat NOC
    The assessee raised a conditional query:

    • If any of the above recoveries (sale of plot, basic infrastructure, or common amenities) were held taxable, would GST still apply where:
      1. Booking of the plot,
      2. Collection of advances, and
      3. Execution of the agreement
        all take place only after obtaining the NOC from the Grampanchayat?

  5. Applicable GST rate, if taxable
    In the event that any of the stated recoveries were held liable to GST, the assessee sought a ruling on the correct rate of tax to be applied to those supplies.

  6. GST impact where a single consolidated consideration is charged
    The assessee also requested a ruling on the scenario where it collects one composite lump-sum consideration for the plot sale, without segregating amounts for land, infrastructure, and amenities. The question was whether, in such a case, the GST implications would change.

  7. Classification of vitrification straw
    Apart from real estate related questions, the assessee sought classification of “Vitrification Straw” under the Customs Tariff heading. Specifically, the question was whether this item could be correctly classified under:

    • Chapter/Heading/Sub Heading/Tariff item 9018.