2026-VIL-514-P&H
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SGST High Court Cases

GST – Taxability of Preferential Location charges on residential/commercial properties, Retrospective application of Circular No. 234/28/2024-GST dated 11.10.2024 – Petitioner sought Advance Ruling as to whether the charges collected by the petitioner against preferential location of its flats are to be taxed independently or along with its main activity of construction/development – The lower authorities ruled that the charges collected against preferential location of the flats are to be taxed independent of the charges received by the petitioner towards development/construction - Whether charges collected by developers against preferential location of flats are to be taxed independently or as part of construction services – HELD - The GST Council, in its 54th meeting recommended that choice of location of an apartment is an integral part of supply of construction services and therefore location charges should not be taxed separately but should attract the same rate of GST as applicable to construction services. The Government accepted this recommendation and issued a clarification vide Circular dated 11.10.2024 clarifying that choice of location of an apartment is an integral part of composite supply of construction services and the charges collected by developers against preferential location of an apartment would attract GST at the same rate as applicable to construction services before issuance of completion certificate - The clarification issued by the Government under Section 168(1) of the CGST Act, 2017 binds the tax authorities and has retrospective application. Accordingly, the orders of the Advance Ruling Authority and the Appellate Authority Advance Ruling, which had held that preferential location charges were to be taxed separately from construction service charges are set aside – The writ petition is allowed
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