Searching Case Laws & Precedent on Legal Query.....!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Scanned Judgements…!
No judgments or citations in sources exempt builder or landowner from GST payment; all relevant references affirm liability (landowner on construction receipt, builder under RCM or forward charge). Arguments for pre-GST exemptions rejected. ["M/S SHYAMARAJU AND CO (INDIA) vs THE DEPUTY COMMISSIONER OF - Karnataka"] ["Shashi Ranjan Constructions Private Limited vs Union of India - Patna"]
In the dynamic world of real estate development in India, questions about tax liabilities frequently arise, especially regarding Goods and Services Tax (GST). A common query among builders and landowners is: Is there any judgments or citations that builder or landowner no need to pay GST? This question touches on critical areas like construction services, works contracts, and property development agreements.
This blog post dives deep into relevant legal documents, court rulings, and provisions to provide clarity. While pre-GST regimes offered some relief for self-supplies, GST laws impose clear liabilities. Note: This is general information based on available documents and not specific legal advice. Consult a tax professional for your situation.
No judgments or citations in the reviewed legal documents state that builders or landowners are exempt from paying GST on construction or related supplies. The materials focus on pre-GST sales tax and service tax on works contracts, consumer protection in development agreements, and GST-specific issues like denial of Input Tax Credit (ITC) under Section 17(5) of the CGST Act. None waive output GST liability for builders or landowners. Chief Commissioner of Central Goods and Service Tax VS M/s Safari Retreats Private Ltd. - 2024 0 Supreme(SC) 856
Key takeaways include:- Pre-GST service tax clarifications exempted self-supply by builders (without contractors), but these do not apply to GST. Jain Housing High Gates, Rep. by its Senior General Manager (Fin. ), Chennai VS Commissioner of Service Tax, Chennai - 2014 0 Supreme(Mad) 2465Saumya Construction (P. ) Ltd VS Commissioner of Service Tax, Ahmedabad - Custom Excise And Service Tax Appellate Tribunal (2013)Maharashtra Chamber of Housing Industry VS Union of India - 2012 0 Supreme(Bom) 147- Under GST, output tax applies to renting or letting immovable property built via works contracts, with ITC often blocked. Chief Commissioner of Central Goods and Service Tax VS M/s Safari Retreats Private Ltd. - 2024 0 Supreme(SC) 856- Works contract cases confirm taxability on goods transfer in construction, but predate GST. Builders Association Of India VS Union Of India - 1989 0 Supreme(SC) 206State Of Rajasthan VS Rajasthan Chemists Association - 2006 6 Supreme 17Commissioner of Income Tax vs Ankitech P. Ltd. - Delhi (2011)- Challenges target ITC denial, not output tax exemption. Union Of India VS Cosmo Films Limited - 2023 0 Supreme(SC) 439Chief Commissioner of Central Goods and Service Tax VS M/s Safari Retreats Private Ltd. - 2024 0 Supreme(SC) 856
Before GST's rollout on July 1, 2017, service tax under the Finance Acts (2004-2010) applied to 'construction of complex services' Section 65(105)(zzq)/(zzzh). Tax was levied only if a contractor was engaged:
If no other person is engaged for construction work and the builder / promoter / developer / any such person undertakes construction work on his own without engaging the services of any other person, then in such cases,-(i) service provider and service recipient relationship does not exist, (ii) services provided are in the nature of self-supply of services. Hence... the question of providing taxable service... does not arise. Jain Housing High Gates, Rep. by its Senior General Manager (Fin. ), Chennai VS Commissioner of Service Tax, Chennai - 2014 0 Supreme(Mad) 2465
Similar logic applied to developer-society agreements: absent a service provider-recipient relationship, no taxable service arose. Saumya Construction (P. ) Ltd VS Commissioner of Service Tax, Ahmedabad - Custom Excise And Service Tax Appellate Tribunal (2013) Circulars clarified that builders constructing for own use or sale (pre-sale deed) involved self-service, exempt from tax; post-sale or with contractors, tax applied. Maharashtra Chamber of Housing Industry VS Union of India - 2012 0 Supreme(Bom) 147
Important caveat: These are pre-GST rules. GST deems works contracts as supply of services under Schedule II of the CGST Act, attracting GST even for self-supplies.
Post-GST, builders and landowners face output GST on supplies like construction services or renting constructed property. Key challenges include:
Imports under Advance Authorizations: No exemption from IGST or Compensation Cess; importers pay and claim ITC. This is exporter-specific and not for builders/landowners. Union Of India VS Cosmo Films Limited - 2023 0 Supreme(SC) 439 > Under the GST regime, no exemption from payment of integrated GST and Compensation Cess would be available for imports under Advance Authorisation. Importers would need to pay IGST and take input tax credit...
ITC Block under Section 17(5): ITC is denied on works contracts or goods/services for constructing immovable property used for renting/letting. Courts have heard arguments like: > ITC is the bedrock of the GST framework... By blocking the ITC on the rentals collected by the assessee who has constructed the building, the State is unjustly enriching itself... Chief Commissioner of Central Goods and Service Tax VS M/s Safari Retreats Private Ltd. - 2024 0 Supreme(SC) 856
Assessees seek ITC (possibly read-down of the section), but output GST on renting remains payable—no exemption from payment.
Pre-GST sales tax cases post-46th Constitutional Amendment treated works contracts as divisible (goods + labor). States could tax the goods component under Article 286 limits:
After the 46th Amendment the works contract which was an indivisible one is by a legal fiction altered into a contract which is divisible... Builders Association Of India VS Union Of India - 1989 0 Supreme(SC) 206State Of Rajasthan VS Rajasthan Chemists Association - 2006 6 Supreme 17Commissioner of Income Tax vs Ankitech P. Ltd. - Delhi (2011)
These affirm tax on construction transfers but do not address GST exemptions.
Many documents highlight disputes in collaboration agreements, where landowners and builders share constructed areas. The builder delivers the owner’s share and retains the builder’s share. Courts view landowners as consumers and builders as service providers for construction deficiencies. ASHOK KUMAR BASU vs SUMIT KUMAR MITRAKUDURAVALLI VENKATA NARSAIAH & ANR. vs CONSUMER GUIDENCE SOCIETY
For instance:- In RERA matters, orders direct payments including GST, rentals to allottees, and costs to landowners/developers. Complaint No. RAJ-RERA-C-N-2022-4796 Argus Flat Owners Associations Versus Shyam Goyal And OthersComplaint No. RAJ-RERA-C-N-2022-5257 Argus Resident Welfare Society Versus ARG Developers Pvt Ltd And Others- NCDRC cases award compensation for delays, excess charges, and unfair terms, but impose actual registration/GST charges. MONA MAYOR & ANR. vs PIONEER URBAN LAND & INFRASTRUCTURE LTD. - 2022 Supreme(Online)(NCDRC) 1204- Builder appeals citing judgments were dismissed as irrelevant. Amrita Rosha Jain VS Bhavendra KumarDLF Homes Panchkula Pvt. Ltd. VS D. S. Dhanda- Collaboration breaches by landowners lead to civil suits for specific performance/damages, not consumer forums. Vinod Kumar VS Somnath Sachdeva - 2015 Supreme(Del) 82Vinod Kumar VS Somnath Sachdeva - 2015 Supreme(Del) 81Sandip Narayan Roychowdhury VS Seema Constructions
These focus on service deficiencies, delays, and possession—not GST exemptions. Cash considerations in agreements (e.g., non-refundable payments) underscore commercial realities but imply tax compliance. Income-tax Officer, Ward-2(5), Ahmedabad VS Shakti Corporation
Recommendations:- Assess GST on construction/renting; claim ITC only if not blocked under Section 17(5).- Verify self-construction rules via GST Council (no exemptions per docs).- No precedent for non-payment—consider litigation if input-output nexus argued.
Builders and landowners generally cannot rely on judgments to avoid GST payments. Pre-GST reliefs do not carry over, and GST enforces tax on works contracts and rentals, with ITC restrictions adding burdens. Consumer disputes in agreements emphasize service obligations but reinforce tax compliance.
Key Takeaways:- No GST exemption judgments found.- Pay output GST; fight ITC denials if applicable.- Stay updated via GST portals and professional advice.
For tailored guidance, reach out to a GST expert. References are listed below for further reading.
The builder is entitled to sell its share of the building as it deemed fit, without reference to the landowner. The builder undertakes to the landowner that it will construct the building within 12 months from the date of sanction of building plan and deliver the owner's share to the landowner. ... The builder puts up a building. Thereafter, the landowner and builder share the constructed area. The builder delivers the “owner's shar....
The builder puts up a building. Thereafter, the landowner and builder share the constructed area. The builder delivers the “owner’s share” to the landholder and retains the “builder’s share”. ... To that extent, the landowner is a consumer, the builder is a service provider and if there is deficiency in service in regard to construction, the dispute raised by the landowner will be a consumer dispute. ... In a true joint venture agreement between the lando....
Hence land owners are liable to pay the GST on the said constructions. ... Whereas from the above discussion and the given facts in the case, it appeared that works contract service is being provided by the builder/developer to the landowner. ... The noticee was served with a notice in Form GST DRC-01A dated 20.05.2023, issued by your good-self directing the noticee to pay CGST and SGST each of Rs.2,15,58,928/- on construction services along with applicable interest thereon for the FY....
However, on 24.07.2018, the builder company claimed and charged Rs. 38,89,625/- which included GST and interest on GST, along with interest on delayed payment. A specific interest of Rs.72,359/- was calculated @ 18% per annum on the delayed payment of Rs.5,43,000/-. 5. ... Further, learned counsel for the builder company reiterated the grounds of the present appeal and argued that the builder company is not liable to pay any interest on any amount as the fault lies with the complainant....
Learned senior counsel for the petitioner has further argued that in case of a development agreement registered prior to coming into force of the GST laws with effect from 01.07.2017, the land stood transferred in favour of the builder. ... We find that Notification No.4 of 2018 dated 25th January 2018 clearly provides that the liability to pay Central tax on the said services (a) and (b) shall arise when the devel- oper/builder transfers possession and right in the constructed complex. ... The supply of services of tr....
Thereafter, the landowner and builder share the constructed area. The builder delivers the “owner’s share” to the landholder and retains the “builder’s share”. ... To that extent, the landowner is a consumer, the builder is a service provider and if there is deficiency in service in regard to construction, the dispute raised by the landowner will be a consumer dispute. ... In a true joint venture agreement between the landowner and another (whether a recognised #HL_ST....
Utilization by builder for work carried out | by it. 6. Payment to complainant association towards cost of litigation. 7. Payment to the respondent landowner and the respondent developer towards the costs incurred by them. 8. ... GST, Money transfer against flat through escrow account, RERA, TDs, i Bank NOC. ... to provide the scheme for the same: - To direct the respondent landowner and the respondent developer to pay the rental amount to the allottees: - To direct lodging of an FIR; - To direc....
Utilization by builder for work carried out | by it. 6. Payment to complainant association towards cost of litigation. 7. Payment to the respondent landowner and the respondent developer towards the costs incurred by them. 8. ... GST, Money transfer against flat through escrow account, RERA, TDs, i Bank NOC. ... to provide the scheme for the same: - To direct the respondent landowner and the respondent developer to pay the rental amount to the allottees: - To direct lodging of an FIR; - To direc....
Consumer Protection Act , 1986 since it adopts unfair methods or practices for the purpose of selling flats by the builder ........., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms.” ... Complainants in their rejoinder denied the allegations of OP and also cited various Hon’ble Supreme court judgements. 6. ... Complainants are liable to pay actual registration charges levied by government authorities.
As the cost of the undivided two-third share in the land, which the landowner agrees to transfer to the builder, is more than the cost of construction of the ground floor by the builder for the landowner, it is also mutually agree that the builder will pay the landowner an additional cash consideration ... The builder shall also pay a sum of Rs. 8 lakhs as non-refundable consideration to the owner. ... He, therefore, enters into an ....
The judgements and citations handed over by learned counsel for the appellant – director builder co. We find that they are not relevant or applicable on the facts and specificities of this case, they are not relevant or applicable here in the manner and for the purpose their relevance and applicability was sought to be argued by learned counsel for the appellant – director of the builder co.
We find that they are not relevant or applicable on the facts and specificities of this case, they are not relevant or applicable here in the manner and for the purpose their relevance and applicability was sought to be argued by learned counsels for the builder co. The judgements and citations handed over by learned counsels for the builder co.
We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a civil court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages....” Uppal Agencies Pvt. Ltd. & Anr., wherein in paragraph 23 it was held as under:- “23.
Uppal Agencies Pvt. Ltd. & Anr., wherein in paragraph 23 it was held as under:- “23. We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a civil court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages....”
On the other hand, where the builder commits breach of his obligations, the owner has two options. Paras 34 and 35 of the said authority run as follows: “34. We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a civil court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnish a cause of action for specific performance and/or damages. He has the right to enforce specific performance and/or claim damages by appro....
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