New Delhi, June 23 (TIWN) Sale of plots with facilities like drainage, water line and electricity will attract a levy of Goods and Services Tax (GST), according to a ruling by the Authority on Advance Ruling (AAR).

The Authority has ruled that GST will be levied on sale of land for which primary facilities like drainage, waterline and electricity have been provided by real estate developer.  This changes the complexion and dynamics of sale of plots as some experts say that land does not come under GST and it remains to be seen if the ruling holds up on higher appeals.  The AAR has concluded that the sale of developed plots will be covered under the clause ''construction of a complex intended for sale to a buyer'' and accordingly GST would be levied.  The ruling came after an applicant had approached the Gujarat bench of AAR on whether Goods and Services Tax (GST) is applicable on sale of plot of land for which, as per the requirement of the respective authority, Zila 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.