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2018 (4) TMI 1077 - AAR - GSTLevy of GST - Valuation - construction services / superstructure - undivided and impartible share of land - Entry 5 of Schedule III of the CGST Act, 2017 - Whether GST will be applicable on the sale of undivided and impartible share of land represented by Agreement to sell the land? - Held that: - From a conjoint reading of Section 7 and Entry 5 of Schedule III of CGST Act, any activity/ transaction which is in the nature of ‘sale of land’ is not covered within the purview of GST. Consequently, no GST is payable on the transactions resulting in the sale of land. Composite supply - Whether GST shall be applicable on sale of superstructure (which is under construction)? - N/N. 11/2017- Central Tax (Rate) dated 28.06.2017 - Held that: - the measure of tax should be the value of goods and services supplied by excluding the value of land. However, since land cannot be separately sold, a deemed value of land need to be ascertained on which GST would not be payable. Under GST Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 - S. No. 3 r/w Paragraph 2, the deemed value of land or undivided share of land has been fixed at one-third of the total amount charged. Hence, in GST, the machinery provisions to ascertain the value of land is available in the notification which has been issued under Sub-Section (5) of Section 15 of the CGST Act, 2017 regarding value of taxable supply - The said Notification has been issued under Section 15(5) of the CGST Act, 2017 by the Government on the recommendation of the GST Council and hence, no separate Rule was required to be issued. Paragraph 2 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 is fully authorised by Section 15(5) of the CGST Act, 2017 to provide machinery provisions to ascertain the value of land for exclusion and to measures the value of supply of goods and services for levy of GST. The said machinery provisions cannot be equated with exemption Notification issued under Section 93(1) of the Finance Act, 1994 which were held to be insufficient by the Hon’ble High Court [2016 (6) TMI 192 - DELHI HIGH COURT]. Ruling:- the value of land, or the undivided share of land, as the case may be, would be deemed to be one-third of the total amount, which is excluded from the value for the purposes of payment of GST Even if agreement between the applicant and the buyer is entered after part of the construction is already completed, whole of the consideration would be added for payment of GST. The applicable rate of GST on the said two-third of total amount is 9% (CGST) and 9% SGST under S. No. 3(i) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 and parallel SGST notification.
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