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2018 (12) TMI 536 - AAR - GSTLevy of GST - Construction services - relevant date of completion of construction of the property - supply of services - GST on any amount received as consideration towards sale of completed offices, after the date of completion, where part of the consideration was received prior to the date of completion - GST on the consideration received as consideration towards the sale of completed offices, where the entire consideration is received after the date of completion of construction. Relevant date of completion of construction of the property - Held that:- Entry No.5 of Schedule II of CGST Act 2017, which stipulates that any construction of a complex or building or a civil structure or a part thereof would be treated as a supply of service and the constructions where the entire consideration has been received after the issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier, are exempt - The stress here is on the words “entire consideration”; “after the issuance of completion certificate by the competent authority, where required” and “first occupation”. The crucial aspect which decides the tax liability is the date of completion certificate or first occupation, whichever is earlier, issued by a competent authority. It is thus clear that the occupancy certificate. which is a legal requirement, would act like a completion certificate and hence the date of such occupancy certificate would be deemed to be the date of completion. Therefore the chartered engineer’s certificate can’t be a substitute for Completion Certificate / Occupation Certificate, required by the CGST Act 2017. Hence the Chartered Engineer’s certificate has no relevance to the question - the date of Occupancy Certificate issued by the Bruhat Bengaluru Mahanagara Palike, competent authority in the instant ease, shall be considered as the date of completion of the property and if the entire amount Of consideration has been received after such date of completion, then that would not be treated as a taxable service, If any part of the consideration is received before such date, then the transaction would be treated as a supply of service as per clause 5 of schedule II to the GST Act and attracts the levy of GST. What constitutes “first occupation”? - Held that:- The word “first occupation” is not defined anywhere in the Act. The Bengaluru Mahanagara Palike Building Bye-Laws 2003, under clause 5.7, stipulates that nobody can occupy the building or portion of the building until the Occupancy Certificate is obtained from the competent authority - the relevant date, in the instant case, would be the date of occupancy certificate or the first occupancy, which can only be after the date of occupancy certificate, whichever is earlier. In the instant case the competent authority i.e. B.B.M.P., Bengaluru issues the completion certificate in the name of “Occupancy Certificate” and hence the date of occupancy certificate need to be considered - the date of first occupation is irrelevant to the instant case & hence can h be considered at all as the completion certificate (“Occupancy Certificate”), is required to be obtained mandatorily by the applicant from the competent authority i.e BBMP, Bengaluru, Karnataka. Ruling:- The date of Occupancy Certificate issued by the competent authority, i.e. Bruhat Bengaluru Mahanagara Palike should be treated as the date of completion of the construction. If any part of the consideration is received before such date of completion, then the transaction would be considered as the supply of services in terms of entry 5 of Schedule II to the GST Acts, and liable for GST. If the entire consideration is received after the date of completion, then the transaction would not be liable to GST.
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