Immovable property under the Goods and Services Tax framework is a critical concept, especially in determining the applicability of works contracts. Under GST, a works contract must relate to immovable property. Therefore, whether an asset qualifies as immovable property significantly impacts the nature of supply, classification, tax liability, and compliance obligations. However, the term immovable property is not defined under the GST law, necessitating reference to definitions in other statutes and interpretations developed through judicial decisions.
Definitions from Other Statutes
To understand what constitutes immovable property under GST, reference is made to the General Clauses Act, 1897, and the Transfer of Property Act, 1882. These legislations offer foundational definitions that help interpret the term in the absence of a direct definition under the GST law.
Under Section 2 of the General Clauses Act, 1897, immovable property includes land, benefits arising out of land, and things attached to the earth or permanently fastened to anything attached to the earth.
Under Section 3 of the Transfer of Property Act, 1882, immovable property does not include standing timber, growing crops, or grass. The Act further explains that things attached to the earth include those rooted in the earth, like trees and shrubs, those embedded in the earth, like walls and buildings, and those attached to what is embedded for the permanent beneficial enjoyment of that to which they are attached.
Fundamental Tests for Determining Immovable Property
From these statutory references, two fundamental tests emerge for identifying immovable property. The first is the degree or extent of attachment. This considers whether dismantling the item would cause damage or render it unfit for reuse. The second is the object or intention behind the attachment. If the object of the attachment is for the permanent beneficial enjoyment of the land or structure to which it is attached, the item is more likely to be considered immovable.
These two tests form the basis of most judicial determinations concerning immovable property under GST and central excise laws before the introduction of GST.
Judicial Interpretation of the Degree of Attachment
The degree or extent of attachment plays a critical role in determining whether an asset is movable or immovable. This test examines whether the removal of the asset would cause substantial damage or loss of function.
In Municipal Corporation of Greater Bombay v Indian Oil Corporation Ltd, the Supreme Court held that petrol tanks resting on their own weight but not fixed with bolts still constituted immovable property as they were erected permanently without the intent of frequent relocation. The Court emphasized permanency as the key test.
In CCE v Josts Engineering Co Ltd, the Supreme Court upheld the Tribunal’s finding that a spray paint booth embedded in the earth, and which could not be dismantled without damage, was immovable. The structure, although possibly removable in parts, was fundamentally fixed to its location.
In CCE Mumbai v Hutchison Max Telecom, the Bombay High Court concluded that telecommunication equipment installed at BTS sites and embedded in concrete, which could not be shifted without causing damage, was immovable property. Dismantling involved damaging embedded parts and required complete reassembly at a new location, rendering the equipment non-marketable in its original form.
Similarly, in Ibex Gallagher Pvt Ltd v CCE, a solar-powered electric fence was held to be immovable because its corner posts were grouted to the ground and could not be shifted without dismantling. The system was customized to a specific location and geometry, and was not capable of being relocated intact.
The principle from these decisions is that if a structure cannot be removed without substantial damage or loss of function, or requires complete dismantling before relocation, it is likely to be considered immovable property under GST.
Judicial Exceptions to the Rule of Attachment
Despite the general rule, courts have carved out exceptions where items are attached to the earth but still considered movable due to their design or mode of attachment.
In CCE Ahmedabad v Solid and Good Construction Works, the Supreme Court ruled that an Asphalt Drum Mix Plant was not immovable because it was not permanently embedded in the earth. The plant was only bolted for stability and could be detached without damage. Hence, the attachment did not meet the test of permanency.
In Sirpur Paper Mills Ltd v CCE Hyderabad, the Supreme Court held that a paper-making machine embedded in concrete was movable because the attachment was to ensure stability and the machine could be dismantled and sold independently.
In Essar Telecom Infrastructure Pvt Ltd v Union of India, the Karnataka High Court held that telecom towers fixed to the ground did not constitute immovable property because they were designed to be dismantled and relocated. The civil work done to install the tower did not change the movable nature of the tower itself.
In Vodafone Mobile Services v Commissioner of Service Tax, the Delhi High Court ruled that telecom towers and shelters were movable because they were fabricated off-site, delivered in knocked-down condition, and only fastened for stability. These could be assembled and reassembled elsewhere without loss of utility or damage.
In National Radio and Electronics Co Ltd v CCE Bombay, a UPS system was found to be movable despite being assembled on site, since it could be dismantled and reinstalled at a different location.
These exceptions emphasize that the test is not merely about physical fastening but also the intent and possibility of relocation without substantial effort or damage.
Circulars and Clarifications
CBEC Circular No. 58/1/2002 clarified that if goods are installed at a site but can be removed without dismantling into parts, then they are considered movable. Even if dismantling is done only for ease of transportation, the goods do not become immovable. The critical factor is whether the goods can be sold or marketed in the original assembled form. If not, and dismantling is required for relocation, then the goods are likely to be immovable.
This circular adds clarity to the understanding that the capacity for marketing or shifting without dismantling is central to the classification.
Practical Implications of the Degree of Attachment Test
When assessing if a chattel becomes an immovable property under GST, one must evaluate if dismantling it would damage it or prevent its reuse. If the item must be dismantled for relocation and that dismantling causes damage or renders it non-functional, then it likely meets the criteria of immovability.
This test becomes particularly relevant for installations such as industrial machinery, towers, or large systems like solar power plants or telecom infrastructure. Their classification directly affects whether the supply of such goods and services amounts to a works contract, attracting different tax treatments under GST.
Complex Installations and Degree of Fixation
Large infrastructure projects often involve systems that are fixed to the ground or buildings. These include generators, elevators, central air conditioning systems, or entire production lines. The degree of attachment for each component may vary, but the system must be assessed holistically.
For example, in ABB India Ltd’s case, the SCADA system installed for metro infrastructure was held to be immovable because the system was attached through extensive cabling and civil work, had no intention of future relocation, and could not be moved without serious disruption or damage. The authority concluded it was a works contract involving immovable property under GST.
Structural and Functional Integration as Indicators
Another factor that supports the classification as immovable property is whether the asset is functionally or structurally integrated with the property to which it is attached. If the structure or machine becomes part of a building or land and functions only when so attached, then it takes on the character of immovable property.
The more integral the asset is to the operation of the premises, the more likely it is to be deemed immovable. For instance, a central air conditioning system embedded within a building’s structure, including ducts, chillers, and controls, would likely be immovable because its removal would require significant structural modifications.
Relevance of Customization and Design to Site
Another important consideration is the degree of customization of the equipment or system to a specific site. If the installation is designed uniquely for a location and cannot be transferred to another location without redesign or reconstruction, then it leans toward immovable property.
This is evident in cases like the electric fencing system or solar installations where the design is suited to the terrain, area size, or environmental conditions. Relocating these systems without redesign is often impractical or impossible, reinforcing their immovable status.
Judicial Interpretation of Immovable Property under GST
The interpretation of what constitutes immovable property under GST has often been influenced by judicial pronouncements. Indian courts, especially the Supreme Court and High Courts, have examined the term in multiple contexts before and after the implementation of the GST law. These judgments are essential in understanding the nuances of how immovable property is treated within the GST framework. One of the earliest and most significant cases is the decision of the Supreme Court in Commissioner of Central Excise v. Solid and Correct Engineering Works (2010), where the Court held that if a plant or machinery is embedded in the earth and cannot be dismantled without substantial damage, it qualifies as immovable property. In this case, the nature of the foundation and whether the item was intended to be permanently fastened to the earth were taken into account. The ruling helped create a foundational understanding for similar GST-related matters.
Another important case is T.T.G. Industries Ltd. v. CCE (2004), in which the Supreme Court observed that even though some equipment may be assembled at the site, if it results in the creation of an immovable structure, it will be considered as immovable property. These decisions, though made under the erstwhile excise laws, have direct relevance under GST as the definitions and interpretations are adopted similarly. In the case of Larsen & Toubro Limited v. State of Karnataka and Another (2013), the Supreme Court elaborated on the distinction between goods and immovable property while discussing works contracts. The court emphasized that once goods become part of immovable property, they lose their character as goods, making them non-taxable under the GST regime as far as the supply of goods is concerned. This distinction is now reflected in the GST law, particularly in the valuation and classification of works contracts.
Case Law Analysis on Classification Disputes
The classification of whether a transaction involves immovable property or not has given rise to various disputes under GST. These cases often involve intricate facts and interpretations. For instance, in the case of Bharti Airtel Ltd. v. Commissioner of Service Tax, the Delhi Tribunal held that towers and shelters used for telecom services, though assembled at the site, did not qualify as immovable property because they could be dismantled and moved without substantial damage. Therefore, they were considered goods and hence taxable under GST. In Kone Elevator India Pvt. Ltd. v. State of Tamil Nadu (2014), the Supreme Court clarified that the supply of elevators, which includes both goods and services, should be considered a works contract if the result is an immovable property. The Court emphasized that the dominant intention of the contract plays a critical role in determining taxability.
Another frequently cited ruling is Commissioner of Central Excise v. Triveni Engineering and Industries Ltd. (2015), where the Court held that machinery which is embedded in the earth but can be dismantled without substantial damage remains movable property and thus taxable. The importance of intention, method of fixation, and the degree of permanence were once again reinforced in this judgment. Each of these cases illustrates how courts rely on physical characteristics, permanence, and purpose of the asset to determine its classification. It becomes evident that there is no single test, and a combination of factors needs to be considered. Hence, taxpayers and authorities must examine contracts and activities on a case-by-case basis.
Taxability of Transactions Involving Immovable Property
Under the GST regime, transactions involving the sale of immovable property are generally outside the scope of GST unless the transaction involves a composite or works contract. As per Schedule III of the CGST Act, the sale of land and the sale of building (subject to certain conditions) are neither treated as a supply of goods nor services. This means that outright sales of immovable property after the issuance of a completion or occupancy certificate are exempt from GST. However, transactions such as the construction of a complete building, civil structure, or a part thereof intended for sale to a buyer before issuance of the completion certificate attract GST as a supply of service under Section 7 of the CGST Act. Such transactions are considered works contracts and are taxed accordingly.
Lease or renting of immovable property is another area that invites GST liability. Renting of commercial property is taxable under GST, while renting of residential property for use as a residence was exempt until recent notifications made certain exceptions. Transfer of development rights (TDR), joint development agreements (JDA), and long-term leases also fall under the taxable category if they meet the conditions of supply. For instance, a developer transferring development rights to a builder in exchange for construction services is considered a taxable supply. In these cases, valuation mechanisms such as those laid down under Rule 31 and 31A of the CGST Rules are applied. Further, input tax credit (ITC) restrictions under Section 17(5) of the CGST Act often apply, particularly when construction is for own use or sale, post-completion certificate.
Works Contract as a Supply Involving Immovable Property
Works contracts under GST are deemed to be a supply of services if they result in the construction of immovable property. The GST law clearly defines a works contract under Section 2(119) of the CGST Act as a contract involving building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration, or commissioning of any immovable property. This definition marks a departure from the earlier tax regimes, where works contracts could involve both movable and immovable property. Now, under GST, works contracts are limited only to immovable property, which simplifies the classification to some extent.
This classification affects the applicable GST rate, place of supply, and ITC eligibility. For example, construction of residential complexes for sale before completion attracts 5% GST without ITC, whereas construction services provided to the government may attract 12% with ITC. The treatment also varies based on whether the service is rendered to a registered person, the type of property constructed, and whether the supply is intra-state or inter-state. Another key aspect is the treatment of inputs and input services. As per Section 17(5)(c) and (d), input tax credit is not available for works contracts resulting in the construction of immovable property unless it is an input service for further supply of works contract service. This restriction is intended to prevent tax leakage and ensure the end-consumer pays the applicable tax.
Composite and Mixed Supplies Involving Immovable Property
Under GST, the concepts of composite and mixed supplies play a significant role in determining the tax treatment of transactions involving immovable property. A composite supply consists of two or more supplies naturally bundled and supplied together, where one of them is a principal supply. A mixed supply consists of two or more individual supplies made together for a single price but not naturally bundled. For example, if a builder sells a flat under construction along with preferential location charges and clubhouse membership, it is considered a composite supply where construction is the principal supply. The entire transaction is taxed at the rate applicable to the principal supply.
In contrast, if a developer sells a ready-to-move-in flat and independently offers household furniture or fittings for a combined price, it could be treated as a mixed supply and taxed at the highest rate applicable to any of the individual supplies. This classification becomes important in determining both the applicable GST rate and ITC eligibility. Businesses must carefully analyze their contracts and billing structures to avoid disputes with tax authorities. Misclassification can lead to interest, penalties, and denial of ITC.
Implications for the Real Estate Sector
The treatment of immovable property under GST has had a profound impact on the real estate sector. Builders, developers, contractors, and buyers are all affected by how different transactions are categorized and taxed. The sector has witnessed changes in pricing models, contract structuring, and compliance requirements. One of the significant shifts was the introduction of new GST rates for the real estate sector, effective April 2019. Residential projects were given the option to choose between old rates with ITC (8%/12%) and new reduced rates (1% for affordable housing and 5% for others) without ITC. This was done to simplify compliance and reduce litigation.
However, the denial of ITC under the new regime has affected the working capital of developers, leading many to reevaluate their pricing strategies. Also, ambiguity in the valuation of the land component, treatment of TDRs, and application of the reverse charge mechanism in joint development arrangements continues to be a grey area. The government has issued multiple notifications and circulars to address industry concerns, but real estate transactions still face complexity due to overlapping legal, commercial, and tax considerations. Developers must also ensure proper invoicing, documentation, and project-wise tracking of ITC to remain compliant.
Registration and Compliance Requirements
Entities involved in transactions relating to immovable property that fall under GST are required to comply with all applicable registration and filing obligations. Builders and contractors who engage in works contracts must register under GST if their aggregate turnover exceeds the prescribed threshold, which is generally Rs. 20 lakhs (Rs. 10 lakhs for special category states). Once registered, businesses must issue proper tax invoices for all taxable supplies, maintain detailed records of contracts, input tax credits, and payments. In case of long-term projects, invoicing must comply with the milestone-based payment schedule or progressive billing system.
Moreover, they must file monthly or quarterly returns (GSTR-1, GSTR-3B) and annual returns (GSTR-9) along with reconciliation statements (GSTR-9C, if applicable). Special attention should be given to valuation rules and classification to avoid mismatch issues. For instance, incorrect treatment of a works contract as a sale of immovable property post-completion may result in demand notices. Compliance becomes more rigorous in cases involving joint development agreements, long-term leasing, or transfer of development rights. These require proper contractual documentation, valuation disclosures, and accounting of input tax credit reversals, if any.
Impact of Classification on Input Tax Credit (ITC)
The classification of a property as movable or immovable has significant implications under GST, especially concerning the eligibility for input tax credit. Under Section 16 of the CGST Act, a registered person is eligible to claim input tax credit on goods or services used in the course or furtherance of business. However, there are restrictions imposed by Section 17(5), which specifically disallow input tax credit on works contract services when supplied for the construction of an immovable property, except when it is an input service for further supply of works contract service.
If a taxpayer constructs an immovable property for their use, ITC is blocked under Section 17(5)(d), even if the property is used for business purposes. For example, if a business constructs a commercial building and uses it as its office space, they are not eligible to claim ITC on the construction cost. This restriction is aimed at preventing misuse of the ITC mechanism for capital assets related to immovable property. However, if the property is leased out and GST is charged on the lease rental, the lessor may be eligible to claim ITC on construction costs, as the activity of leasing is considered a taxable supply.
Sale of Land and Building: Schedule III and GST Exemption
According to Schedule III of the CGST Act, the sale of land and, subject to certain conditions, the sale of a building is neither treated as a supply of goods nor a supply of services. This essentially places such transactions outside the purview of GST. The rationale is that the sale of land or a fully constructed building is already subject to stamp duty and registration charges, which are state levies. Double taxation under GST is avoided by excluding these transactions.
However, the sale of under-construction property is treated differently. If a developer sells an apartment before completion or before obtaining a completion certificate, GST is applicable on such a sale. In this case, the transaction is classified as a supply of service. The tax is levied at a concessional rate, depending on the type of property and the applicable rules. Affordable housing, for instance, may attract a lower rate. The moment the completion certificate is received, any subsequent sale becomes exempt from GST under Schedule III.
Renting of Immovable Property and GST
Renting or leasing of immovable property is considered a supply of service under GST and is taxable unless specifically exempt. The taxability depends on the nature of the property and the purpose for which it is rented. For instance, renting of residential property for residential use is exempt, while renting of commercial property is taxable. If a residential property is rented for commercial purposes, GST is applicable.
In cases where the rent is paid by a registered business entity, the reverse charge mechanism (RCM) may apply. Under RCM, the recipient of the service is liable to pay GST instead of the supplier. This provision was introduced to bring unregistered landlords into the tax net indirectly. If a business takes residential premises on rent for office use, GST is applicable under RCM.
Moreover, leasing of land and buildings for industrial, commercial, or business purposes is also taxable. Long-term leases, especially those granted by government authorities, are often considered a deemed sale and may attract GST. The specific conditions, rates, and thresholds depend on the type of lease and the applicable notifications issued by the government.
Works Contract and Immovable Property
Works contract is a composite supply involving both goods and services for carrying out the construction, erection, installation, or renovation of immovable property. Under GST, a works contract is deemed to be a supply of service. The definition under Section 2(119) of the CGST Act limits works contract to activities in relation to immovable property only. Therefore, contracts involving movable items do not fall under this category and are treated as composite or mixed supplies, depending on the nature of the transaction.
Works contract services are taxed at specific rates and come with input tax credit restrictions. As discussed earlier, ITC on works contract services is blocked if used for the construction of immovable property, unless used for further supply. The tax implications also differ based on whether the contract is with or without the transfer of property in goods. In turnkey projects, for example, the entire value is taxable as a works contract.
Developers, contractors, and subcontractors need to analyze their contracts carefully to determine the applicability of GST, the rate of tax, and ITC eligibility. Misclassification can lead to litigation and demand notices. Hence, proper documentation and contract structuring are essential to comply with GST provisions.
Joint Development Agreements (JDAs) and Immovable Property
Joint Development Agreements are common in the real estate sector, where a landowner allows a developer to construct a building on their land in exchange for a share in the constructed property or monetary consideration. The GST implications of JDAs are complex and have been clarified through various circulars and advance rulings.
Under JDAs, two supplies may occur: the supply of development rights by the landowner to the developer, and the supply of constructed units by the developer to the landowner. Both are considered taxable supplies under GST, although the time of supply and valuation rules may vary.
To simplify tax compliance, the government has provided that GST on development rights is payable only when the developer transfers possession of constructed units to the landowner. This deferment helps avoid cash flow issues and aligns tax liability with the actual supply of goods or services.
However, if the developer sells apartments to third-party buyers before completion, GST is applicable on such sales. The classification of the constructed unit as immovable property becomes relevant in determining the nature of supply and the applicability of ITC on construction costs.
Advance Rulings on Immovable Property
Advance rulings under GST provide clarity to taxpayers on taxability, classification, rate of tax, and input tax credit. Several advance rulings have dealt with the classification of movable and immovable property, especially in cases involving prefabricated structures, composite contracts, and real estate transactions.
For example, the Authority for Advance Rulings (AAR) in several states has ruled that certain modular kitchens, partitions, or solar panels that are permanently affixed to a building become immovable property and are not eligible for ITC. On the other hand, structures that retain their character as movable, even when installed at a location, have been treated as movable goods and allowed ITC.
While advance rulings are binding only on the applicant and jurisdictional officer, they provide persuasive value and insight into the interpretation of GST laws. However, conflicting rulings from different states have led to ambiguity, necessitating further clarification from the Appellate Authority for Advance Ruling (AAAR) or judicial forums.
Composite and Mixed Supplies in the Context of Immovable Property
GST differentiates between composite supply and mixed supply, which impacts the taxability of transactions involving immovable property. A composite supply involves two or more supplies that are naturally bundled and supplied together in the ordinary course of business, where one is a principal supply. The entire transaction is taxed at the rate applicable to the principal supply.
In real estate projects, developers often offer amenities like clubhouses, landscaping, security, and maintenance services along with the apartmentss. These are considered part of a composite supply, where the principal supply is the construction of the apartment. Hence, the GST rate applicable to the apartment is levied on the entire value.
In contrast, a mixed supply involves two or more independent supplies made together for a single price, and the highest rate of tax among the components is applied. Identifying the correct classification is essential to apply the correct GST rate and avoid disputes.
Transfer of Development Rights (TDR) and Floor Space Index (FSI)
Transfer of Development Rights (TDR) and Floor Space Index (FSI) are commonly used instruments in the real estate sector. These rights are often transferred by landowners to developers or between developers. The GST law treats TDR and FSI as a supply of servicess, liable to tax.
However, the government has issued exemptions under specific conditions. For instance, transfer of development rights for the construction of residential apartments, where the apartments are sold before completion, may be exempt up to the extent of units sold before obtaining the completion certificate. Any unsold units are considered as self-supply and subject to GST on a notional value.
The valuation and timing of supply for TDR and FSI are critical. Developers need to ensure proper documentation and compliance with rules to avoid disputes. The interplay between state-level stamp duty laws and GST also adds complexity to such transactions.
Taxability of Ready-Mix Concrete Plants and Movable Equipment
Many construction companies set up ready-mix concrete (RMC) plants at construction sites. The classification of these plants as movable or immovable property determines the eligibility for input tax credit on capital goods used in such plants.
Judicial rulings have held that if the RMC plant is erected temporarily and can be dismantled without substantial damage, it is considered movable. Consequently, ITC on machinery and equipment used for such plants may be allowed. However, if the plant is embedded permanently in the earth, it becomes immovable, and ITC may be blocked.
Similarly, movable equipment used in construction projects, such as scaffolding, cranes, and prefabricated structures, may qualify for ITC if they are not capitalized as part of immovable property. The treatment depends on the facts and circumstances of each case.
Key Case Laws Continued
In the continuation of previous discussions, one notable case is the Karnataka High Court judgment in the case of Wipro Ltd. vs Assistant Commissioner of Central Tax (GST-AAR Karnataka). In this case, the applicant sought a ruling on whether GST would apply on lease rentals paid for a property that was partially used as a guest house and partially for business operations. The court observed that when immovable property is leased for residential purposes, it falls outside the scope of GST; however, if the same property is used for commercial purposes like running a guest house or lodging, GST becomes applicable. This emphasized the importance of “intended usage” in determining taxability under GST.
Another relevant case is Tata Projects Limited vs Union of India, where the issue was whether the installation and commissioning of plant and machinery (immovable property) attracted GST. The court emphasized that if the plant and machineryare embedded and cannot be dismantled without substantial damage, they would be classified as immovable property. However, services related to its commissioning may still attract GST as a “composite supply.”
Treatment Under GST – Supply of Immovable Property
Under GST, the supply of immovable property (other than under lease, tenancy, or license to occupy land) is generally outside the purview of the supply of goods or services. This is evident from Schedule III of the CGST Act, which includes the sale of land and, subject to clause (b) of paragraph 5 of Schedule II, the sale of building, as activities or transactions which shall be treated neither as supply of goods nor supply of services.
However, Schedule II, Para 5(b) states that “construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after the issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier” shall be treated as a supply of service. Therefore, any sale of immovable property before completion is treated as a supply and hence taxable under GST.
Exemptions Related to Immovable Property under GST
Certain exemptions apply when it comes to GST and immovable property. Some of the major ones include:
- Renting of Residential Dwelling for Residential Purpose: As per Notification No. 12/2017 – Central Tax (Rate), services by way of renting of residential dwelling for use as residence are exempt from GST.
- Sale of Land and Completed Building: As discussed earlier, the sale of land and the sale of a building after the completion certificate has been issued or after its first occupation is neither a supply of goods nor services and hence not liable to GST.
- Lease of Agricultural Land: Leasing or renting of land for agriculture, including agro-forestry, horticulture, or planting of trees, is exempt from GST.
- Pure Services to Government Entity: Pure services (excluding works contract service or other composite supplies) provided to government or local authorities for any function entrusted to a Panchayat under Article 243G of the Constitution are exempt.
Valuation and ITC Implications
If a transaction qualifies as a supply under GST involving immovable property, valuation becomes critical. The value of supply is determined based on the transaction value as per Section 15 of the CGST Act. If the transaction involves related parties or non-monetary consideration, valuation rules as per the CGST Rules come into play.
Regarding Input Tax Credit (ITC), Section 17(5) of the CGST Act blocks ITC on works contract services when supplied for the construction of an immovable property (other than plant and machinery), except where it is an input service for further supply of works contractservices. Additionally, ITC on goods and services used for the construction of immovable property (except plant and machinery) on one’s account, including when such goods or services are used in the course or furtherance of business, is not allowed.
Conclusion
The GST treatment of immovable property involves nuanced considerations of whether a transaction qualifies as a supply, and if so, whether it is supply of goods or services. The categorization of property as immovable, composite, or mixed supply has direct implications for taxability. Case laws and GST Council clarifications have further guided this complex interpretation. While certain types of immovable property transactions are exempt from the GST ambit, several others, such as under-construction properties, leasing for commercial use, and works contracts,,, are taxable. Taxpayers must therefore carefully evaluate the nature of their transaction, usage, and timing to determine their GST liability.