GST Authority Investigates Soil Transactions at Construction Sites, Eyes Over ₹100 Crore in Tax Recoveries
The Goods and Services Tax (GST) authority is scrutinizing transactions involving soil that was removed during the development of construction sites. It is projected that this could lead to the recovery of over 100 crore rupees in taxes from the developers and those trading the soil.
The GST authority has contacted developers, requesting transaction details of the excavated soil over the last six years.
While constructing skyscrapers, developers need to excavate the ground to build the foundation and at least two basement levels, resulting in a significant quantity of soil being removed and sold according to demand.
Upon investigation, authorities discovered that the transactions between the excavators and the developers were being treated as barter trades, with the excavator trading the soil for their services. However, the GST officials are not convinced by this explanation and are continuing their probe.
The department suspects that the soil is being commercialized without appropriate tax payments.
Developers, on the other hand, are expressing dissatisfaction with the investigation, particularly concerning transactions from prior years. An official from the Confederation of Real Estate Developers’ Associations of India (CREDAI) in Gujarat voiced objections that have been raised with the government regarding the retrospective nature of the investigation.
A leading official from CREDAI in Surat mentioned that developers, having received inquiries from the tax department, plan to meet with GST officials to discuss and present their case regarding this matter.