GST to be applicable only on construction and not on land cost: Gujarat HC

Gandhinagar: The Gujarat High Court stated in its verdict that the actual value of land should be deducted to arrive at GST on cost of construction of a flat. As per the current provisions, 1/3rd of the total amount charged is deducted to arrive at the cost of construction for the calculation of tax. The high court ruled that the deeming fiction of 1/3rd deduction towards land cost in construction contracts is not mandatory. Such deduction can be permitted at the option of a taxable person particularly in cases where the value of land or undivided share of land is not ascertainable, the high court maintained.