Research Paper
Goods and Services Tax (GST) is one of the biggest indirect tax reforms since independence. It has replaced various indirect taxes such as VAT, Excise Duty, Service Tax, Sales Tax, Entertainment Tax, etc. However, the transactions in immovable property are still outside the purview of GST. The States have exclusive power to tax the transactions in immovable properties. The taxability of real estate transactions involving composite supply of goods, services and land is one of the most debated issues under the pre-GST law which continued even under GST. This paper discusses about the deeming fictions created in respect of the real estate transactions and the issues involved therein, challenges being faced by the taxpayers and the probable/alternate solutions that can be looked at. The objective is to study whether the taxpayer can take the actual land value as deduction wherever the land value is determinable), instead of the deemed value of 1/3rd of the total value (construction + land) charged from the customer.
