Case Details: DLF Ltd. vs. Commissioner of Central Goods and Service Tax (2026) 42 Centax 437 (P&H.)
Judiciary and Counsel Details
- Deepak Sibal & Lapita Banerjee, JJ.
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Shri Puneet Aggarwal, Adv., for the Petitioner.
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Shri Sourabh Goel, Senior Standing Counsel & Ms Geetika Sharma, Adv., for the Respondent.
Facts of the Case
The petitioner-developer filed an application before the Authority for Advance Ruling (AAR) seeking a ruling on whether preferential location charges (PLC) collected for flats were taxable independently or along with the main supply of construction/development services. The AAR held that PLC was taxable independently, and the Appellate Authority for Advance Ruling (AAAR) upheld the ruling. Subsequently, in its 54th meeting, the GST Council recommended that PLC should be treated as part of construction services and taxed at the same rate, following which the Government issued Circular No. 234/28/2024-GST dated 11-10-2024 under Section 168(1) of the CGST Act. The petitioner challenged the adverse rulings. The matter was placed before the High Court.
High Court Held
The High Court held that Circular No. 234/28/2024-GST, dated 11-10-2024, clarified that the choice of location of an apartment is an integral part of the supply of construction services. It further clarified that PLC forms part of the consideration for such supply, thereby attracting GST at the same rate as construction services. The Court also observed that the circular, issued under Section 168(1), is binding on the authorities and, being clarificatory in nature, operates retrospectively. Consequently, the orders of the AAR and AAAR, which held PLC independently taxable, were quashed, with all necessary consequences to follow.
List of Departmental Clarification Cited
- Circular No. 234/28/2024-GST, Dated 11-10-2024
