Transfer of Partly Constructed Property on ‘As Is Where Is’ Basis Without Construction Service Component Does Not Attract GST | HC

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  • Last Updated on 27 April, 2025

Transfer of Partly Constructed Property

Case Details: Rohan Corporation India Pvt Ltd. vs. Union of India - [2025] 173 taxmann.com 480 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • V. Raghuraman, Senior Counsel, Anil Kumar B.Cherian PunnoseBhanumurthy J.S., Advs. for the Petitioner.
  • Madanan R. Pillai, CGC, Akash B. Shetty, Advs. & K. Hemakumar, AGA for the Respondent.

Facts of the Case

The petitioner purchased a partly constructed commercial shopping mall from the liquidator on an ‘as is where is’ basis, without any construction service component being involved in the transaction. The petitioner paid substantial stamp duty and subsequently remitted GST under protest. The petitioner then filed a claim for a refund of the GST paid, contending that the transaction did not involve any construction services.

However, the Revenue rejected the refund claim, arguing that the transaction fell under Entry 5(b) of Schedule II of the Central Goods and Services Tax (CGST) Act, which deals with construction services. The Revenue asserted that the transaction should be classified under construction services, thus subjecting it to GST. The petitioner then filed writ petition to Karnataka High Court.

High Court Held

The Hon’ble Karnataka High Court held that the transaction constituted a pure sale of immovable property, devoid of any construction service element. The court emphasized that the agreement between the petitioner and the liquidator did not include any provision for construction services. It further clarified that Entry 5(b) of Schedule II applies only when there is a mutual agreement between the parties for the provision of construction services. Since no such agreement was present, the transaction fell under Entry 5 of Schedule III, which excludes it from being classified as a supply of goods or services, thereby not attracting GST. Consequently, the court directed the refund claim to be allowed with interest, ruling in favour of the petitioner.

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Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied