TMI Blog2020 (3) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rule 98 of Land Development Rules, 1984 - In view of the above, the date of issuance of completion certificate by the competent authority in the instant case, 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. Whether the booking of units in a project and consequently receipt of advance against that booking after first occupation of the project, where the project has been completed and promoter has applied for issuance of completion certificate, which is pending before local authority; is outside the purview of Goods and Services Tax? - HELD THAT:- The occupancy of any unit, without observance of all procedures as mandated under the statute or any other law/rule for the time being in force leading to non-issuance of such mandatory completion certificate by the Competent authority, can in no way be termed as a valid occupancy, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing questions :- (i) Whether the sale / booking of units in a project after its first occupation and receipt of advance against that booking is classifiable under Para 5 of Schedule-III to the CGST Act, 2017 as sale of building and thus neither regarded as Supply of goods nor supply of services? Thus whether the same is outside the purview of Goods and Services Tax? (ii) Whether the booking of units in a project and consequently receipt of advance against that booking after first occupation of the project, where the project has been completed and promoter has applied for issuance of completion certificate, which is pending before local authority; is outside the purview of Goods and Services Tax? 2 . Facts of the case :- (I) M/s. Bilaspur Infrastructure Private Limited having its registered office of BF-1. First Floor, Rajiv Plaza, Opposite Axis Bank, Bilaspur, Chhattisgarh, Pin-495001 (hereinafter referred to as the company) is a company registered under GST vide Registration NO. 22AACCB4045MIZV. (II) The company is engaged in development of real estate projects. The company is having a project at Juno, Bilaspur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, receipt of entire consideration after the said first occupation will not be regarded as supply of services and hence the same will be outside the purview of GST in terms of clause 5 of Schedule III to the CGST Act, 2017. (VI) It is important to mention here that the term First Occupation was not there in Section 66E of erstwhile Service Tax Act (Finance Act, 1994) and is newly introduced in GST regime. Further the said term is nowhere defined in entire GST law. Thus meaning of said term is required to be taken from general parlance. As per general parlance, the term first occupation may said to be taken place when a particular unit of the building is first occupied by the occupier/ allottee/transferee. (VII) In applicant's case, the first occupation was done in the first week of March, 2019. Further that they have already submitted some sample photographs proving the completion of building before the Advance Ruling Authority in the hearing conducted on 3rd July, 2019. (VIII) Thus in applicant's case, whether the first occupation can be said to have taken place in the applicant's building as on date and hence Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o communicate its refusal to grant permission, within a period of 15 days after receipt of notice of completion, such permission shall be deemed to have been granted. Section 301 of The Chhattisgarh Municipal Corporation Act, 1956 provides as under : Completion certificate and permission to occupy or use . - (1) Every person who - (i) erects or re-erects any buildings; or (ii) makes any material external alteration in or addition to any existing building or (iii) constructs or re-constructs any projecting portion of a building which the Commissioner is empowered under Section 305 require to be set back or is empowered to give permission to construct or re-construct: shall within one month of the completion of the work liver to the Commissioner at his office a notice in writing of such completion and shall give to the Commissioner all necessary facilities for the inspection of such work. (2) Within seven days after the receipt of the said notice the Commissioner shall depute an officer to commence the inspection of such work. (3) Within seven days from the date of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir instant application seeks advance ruling under Section 97 of the Chhattisgarh Goods and Services Tax Act, 2017 as to whether the sale booking of units in a project after its first occupation and receipt of advance against that booking attracts no GST, being out of the purview of either supply of goods or supply of services and such transaction being sale, falling under Para 5 of Schedule -lll to the CGST Act, 2017. Similarly they also desire ruling as to whether in the case of booking of units in a project and consequently on receipt of advance against such booking after the first occupation of the project, where the project has been completed and promoter has applied for issuance of completion certificate which is pending before local authority, is outside the purview of Goods and Services Tax, 5.2 As per Section 9(1) of the Central Goods and Services Tax ( CGST ) Act, 2017, tax shall be levied on supply' of goods or services or both. Further scope of supply is provided u/s 7 of the said Act, Section 7(2) is relevant and hence reproduced below : Section 7. Scope of supply - (2) Notwithstanding anything contained in sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration has been received after issuance of completion certificate, Where required, by the competent authority or after its first occupation, whichever is earlier shall be regarded as supply of service and hence will be subjected to tax. 7. It has thus been the contention of the applicant that even if the completion certificate has not been received by the Builder which in the instant case has been claimed by the applicant to be pending with the authorities, if first occupancy in the premises has taken place, then builders may not be required to charge GST if entire consideration is received after first occupation. 8. Schedule-II of CGST Act, 2017 supra provides as under : The following shall be treated as supply of services, namely :- Construction of a complex, building, civil structure or a part thereof, including a or building intended for sale to a buyer, wholly or partly except where the entire consideration has been received after of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier 8.1 Thus effectively the relevance here is on the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.4 Section 301 of The Chhattisgarh Municipal Corporation Act, 1956 , provides as under : Completion certificate and permission to occupy or use. - (1) Every person who - (i) erects or re-erects any buildings; or (ii) makes any material external alteration in or addition to any existing building; or (iii) constructs or re-constructs any projecting portion of a building which the Commissioner is empowered under Section 305 require to be set back or is empowered to give permission to construct or re-construct; shall within one month of the completion of the work deliver to the Commissioner at his office a notice in writing of such completion and shall give to the Commissioner all necessary facilities for the inspection of such work. (2) Within seven days after the receipt of the said notice the Commissioner shall depute an officer to commence the inspection of work. (3) Within seven days from the date of commencement of such inspection the Commissioner shall - (a) give permission for the occupation of the building erected or for the use of the part of the build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also noteworthy to observe here that occupancy of any unit, without observance of all procedures as mandated under the statute or any other law/rule for the time being in force leading to non-issuance of such mandatory completion certificate by the Competent authority, can in no way be termed as a valid occupancy, especially in the wake of clarifications supra, issued by the competent jurisdictional authorities. Although this authority is not in judgment on the legality or otherwise of the occupancy of the unit by any of the occupant without the issuance of the said completion certificate by the competent authority, it follows from the response by the authorities of Municipal Corporation supra. that this is against the letter and spirit of law in force. It also needs mention here that occupancy of the residential units without observance of the measures as mandated under the law can in no way be termed as valid/ bona fide occupancy, especially when the competent authorities are seized with the matter for want of observance of legal procedure by the applicant. Allowing the occupants to such occupancy of the units by the applicant, without observance of procedures ..... X X X X Extracts X X X X X X X X Extracts X X X X
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