Gujarat HC - Summary

One Third deduction towards value of land in construction contracts for residential units, held ultra vires the GST Acts and is read down as optional in cases where actual value not ascertainable - Gujarat High Court

In a recent judgment¹, the Gujarat High Court ('the HC') has held that the Entry 3(if) of Notification No. 11/2017-Central Tax (Rate) as well as Entry 3(if) of Notification No. 11/2017 – State Tax (Rate) along with paragraph no. 2 of both the notifications, mandatorily requiring to include value of land in the value of construction contracts and then allowing deduction of 1/3rd value towards land out of the total contract value, is ultra vires the provisions of Central Goods and Services Act, 2017 read with Gujarat State Goods and Services Act, 2017 ('the GST Acts'). However, without striking down the same from the law, the HC 'read down' the provision to hold that such an abatement would be available at the option of an assessee in those cases where