Farmland India
P11 · Taxation, Stamp Duty & Registration

GST on Land and Plots in India (2026)

Why a plain sale of land is outside GST, when developed plots and related deals are treated differently, and what a buyer should ask for in writing.

Farmland India Reviewed · Updated October 2026 · Official sources linked below

A plain sale of land is not a supply under the GST law, so no GST is charged on it. The picture changes when a developer sells plots with roads and amenities, forfeits an advance, or transfers development rights. This guide sets out what we could confirm on GST Council and CBIC material, and what you must check for your own deal.

Sale of land is outside GST

The Central GST Act, 2017 has a Schedule III that lists activities treated as neither a supply of goods nor a supply of services. Entry 5 reads: "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". We saw this wording quoted in advance rulings published on the GST Council website. The Ministry of Finance (Tax Research Unit) FAQs on real estate, Part II, dated 14 May 2019, say the same thing in plain words: "As per Schedule III, Entry No 5, of CGST Act, sale of land is not a supply."

For a buyer of farmland from an individual farmer, this means there is no GST on the land price. Your costs are stamp duty and registration, which are state charges, and income tax questions for the seller and sometimes for you. See stamp duty and registration charges by state and tax benefits of agricultural land.

The GST Council FAQs state that they "do not have force of law" and that, if they conflict with the gazette notifications, the notifications prevail. We therefore treat them as an official explanation and not as the final word.

Developed plots are not always a plain land sale

The exclusion in Schedule III covers a sale of land. It does not automatically cover everything a developer does around the land. In Advance Ruling No. GUJ/GAAR/R/2020/11 dated 19 May 2020, the Gujarat Authority for Advance Ruling looked at an applicant who would sell plots after providing primary amenities such as drainage, water and electricity lines and land levelling, as the approving authority required. The Authority held that the sale of such developed plots was "not equivalent to sale of land". It reasoned that the price was linked to amenities and common infrastructure, treated the sale as a supply of services, and answered the question in the affirmative, meaning GST was payable.

An advance ruling is given on the facts of one applicant. We could not confirm from official material that every state authority, appellate authority or High Court takes the same view for every layout. Headlines of other rulings that we saw on search results suggest that the answer can turn on facts, for example whether the buyer pays money in advance for development work. We did not open those and do not rely on them.

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What this means for a plot buyer

If the seller is a registered developer and the agreement bundles development work with the plot, ask in writing whether GST is being charged, on what value, and under which GST registration. If the seller is an individual selling a plain parcel with no development promise, the Schedule III position applies.

Forfeited advance is a different question

Advance Ruling No. GUJ/GAAR/R/58/2020 dated 30 July 2020 dealt with a seller of factory land who forfeited Rs 20 lakh of an agreed price of Rs 1 crore when the buyer did not complete. The seller argued that because land sale is outside GST, the forfeiture should be too. The Authority rejected that. It said the money was not received on account of sale of land but because of the buyer's breach, and treated it as an agreement to refrain from or tolerate an act under clause 5(e) of Schedule II, which is a supply of services liable to GST.

The ruling again binds the applicant, but it shows why a buyer should read the cancellation and forfeiture clause in an agreement to sell. A forfeited token can attract tax in the seller's hands, and the seller may try to recover it from you. Compare with the process in the sale deed guide and the paperwork stage in the land registration process.

Development rights, TDR and long leases

The 2019 real estate FAQs address a landowner who gives land to a promoter in exchange for apartments or a share. They say a transfer of development rights by a landowner, whether an individual or not, is treated as a taxable supply of service (FAQ 39), and that a transfer of development rights (TDR) is taxed at 18% under reverse charge (FAQ 28). Part II of the FAQs repeats an 18% rate with input tax credit for TDR and FSI under Notification No. 11/2017. These rates come from May 2019 documents and may have been revised since, so confirm the current rate on cbic-gst.gov.in before use.

For farmland buyers this matters mostly in joint development deals near cities, where a farmer's land is developed by a builder. If you are buying from a farmer who has already signed a development agreement, ask for a copy and check whether any GST liability is passed to you.

Quick reference table

TransactionGST position we could confirmSource type
Sale of land by ownerSchedule III entry 5: not a supplyGST Council FAQs and rulings quoting the Act
Sale of developed plots with amenitiesGujarat AAR 2020: treated as a service, GST payable; applicant specificGST Council website, advance ruling
Forfeiture of advance on land saleGujarat AAR 2020: a service under Schedule II 5(e); applicant specificGST Council website, advance ruling
Transfer of development rights by landownerTaxable service per 2019 FAQ 39Ministry of Finance FAQ, 2019
Deduction of land value for apartmentsOne-third abatement stated in FAQ 36 for apartmentsMinistry of Finance FAQ, 2019

The one-third land deduction in FAQ 36 relates to apartment projects. It is not a rule for plots. We did not find a plot-specific deduction in the documents we opened.

Buyer checklist for GST on land

  1. Ask the seller whether they are an individual, a company or a developer, and whether they hold a GST registration.
  2. Read the agreement for any development, amenity or maintenance charges. Ask for a written breakdown of land price and service charges.
  3. If a GST invoice is raised, check the seller's GSTIN on the GST portal at gst.gov.in before paying.
  4. Keep the registered deed value consistent with what you pay. See Section 50C and 56(2)(x) for the income tax side.
  5. Note that TDS on purchase of immovable property is a separate income tax rule; see TDS on property purchase.
  6. Before you pay, compare the land use. Agricultural, residential and commercial land are treated differently on use, even if GST is not charged on the land. See agricultural vs commercial land.
  7. Take written advice from a chartered accountant if the seller is a developer.
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Tax rules change; check the current year

GST rates, notifications and rulings are revised often, and the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. Read the current notification on the official site before you rely on anything here. This page is general information and not tax advice.

Why many buyers never see GST

Most farmland deals in the six North Indian states we cover are between private persons, and the land is sold as it stands. In those deals the only taxes the buyer meets are stamp duty and registration, and possibly TDS. GST appears when a developer, a promoter or a company is involved. That includes plotted farmhouse projects with roads and gates, which are marketed in many corridors.

We recommend treating every "plotted development" as a service-and-land bundle until the seller shows a written tax position. Do not accept verbal statements such as "no tax on land". The statement may be true for the land, but incomplete for the development charges.

Whether the land is agricultural at all is also a legal question. Rules on who can buy and on land use are covered in who can own farmland in India.

What is unconfirmed

We could not confirm the current GST rates on development services and TDR, because the documents we opened date from 2019. We could not confirm a CBIC circular or notification that settles the treatment of developed plots across India. We did not open the CGST Act text on indiacode.nic.in (access was blocked), so entry 5 is quoted as it appears in the GST Council FAQs and rulings. We could not confirm how High Courts have treated plotted developments. Please check cbic-gst.gov.in and gst.gov.in for the current position.

Frequently Asked Questions

Is GST charged on buying agricultural land?
No GST is charged on a sale of land by its owner. Entry 5 of Schedule III to the CGST Act lists sale of land as neither a supply of goods nor of services, as quoted in GST Council material.
Does GST apply to plots in a farmhouse project?
It can. A 2020 Gujarat advance ruling treated sale of developed plots with amenities as a service liable to GST. That ruling was for one applicant, so check the seller's tax position for your project.
What is Schedule III of the CGST Act?
It is the list of activities that are treated as neither a supply of goods nor a supply of services. Sale of land is entry 5.
Is GST charged on stamp duty or registration fees?
We did not find any statement that GST applies to stamp duty. Stamp duty and registration are state matters; see our stamp duty by state guide.
Does GST apply if the seller forfeits my token money?
A 2020 Gujarat advance ruling held that a forfeited advance on a land sale was a taxable service. The ruling is specific to its applicant, but it shows the risk.
Is development rights transfer taxed?
The 2019 Ministry of Finance FAQs say a landowner's transfer of development rights is a taxable service and that TDR is taxed at 18% under reverse charge. Confirm current rates on the CBIC site.
Do FAQs and advance rulings have the force of law?
The GST Council FAQs say they do not have force of law and that notifications prevail. An advance ruling is given on the applicant's facts. Treat both as guidance.
Where do I check a seller's GST registration?
On the GST portal at gst.gov.in, using the GSTIN on the invoice.
Is income tax different from GST on land?
Yes. Income tax questions such as capital gains and circle rate tax are separate. See our pages on capital gains and on Section 50C and 56(2)(x).
Should I pay GST if the seller asks for it?
Ask for a tax invoice with GSTIN and a written explanation of the service. If the seller is an individual selling plain land, ask why GST is being charged.

Sources

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