TMI Blog2020 (11) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Of completion certificate and taking over of their share of units / flats. Thus the sale of said flats is not exigible to GST, if and only if they are sold after issuance of Completion / Occupancy certificate, in which case the said transaction is to be treated neither as supply of goods nor supply of services, in terms of clause 5 of Schedule III It is an admitted fact that the developer had the sole and exclusive right of marketing the entire project. The applicant is silent about the fact that whether the developer had executed any sale deeds on behalf of the applicant in respect of the applicant s share of units/flats. Thus if the applicant themselves or the developer on behalf of the applicant have sold the applicant s share of units/flats prior to issuance of completion certificate, then the transactions amount to supply of Works Contract Service are liable to GST - The time of supply in the instant case would be the time at which the constructed flats are handed over by the developer to the applicant. In the instant case the applicant claims / contends that they have received their share of units/flats after the issuance of Completion [Occupancy certificate by Bruh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Applicant has not received any part of the sale consideration prior to the said date of occupancy certificate, thus falling under Entry No.5 of Schedule III of CGST Act read with Notification No.11/2017-Centra1 Tax (Rate) dated 28.06.2017 and the corresponding provisions of SGST Act. 3. Admissibility of the application : The applicant, being an un-registered person, filed the instant application, in relation to the applicability of a notification, determination of liability to pay tax and whether the activity of the applicant amounts to or results in supply. Further the applicant has sought advance ruling in respect of the question on the issues covered under Section 97(2)(b), (e) (g) of the CGST Act 2017 respectively and hence the application is admitted. 4. The applicant furnished the following facts relevant to the instant application. 4.1 The Applicant had given irrevocable license to the Developer to execute and complete the project and till the developer s share is entirely conveyed to the Developer or his nominees. The Developer shall at its sole cost, expense and responsibility, develop the schedule property in accordance with the specifications set out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation of said services is to be determined in terms of paragraph 2 of the Notification No. 11/2017 Central Tax (Rate) dated 28.6.2017, prior to 1.4.2019 5. Applicant s interpretation of law : The Applicant submits their interpretation of law as under: 5.1 The applicant contends that the liability to pay GST by the applicant would not arise as the applicant has not entered any agreement with prospective buyers before receiving the completion certificate from the competitive authority i.e. BBMP. The Applicant further states that clause 1.7 of Area Sharing Agreement restricts the right of the Applicant to execute any sale agreements or any conveyancing deeds till the applicant takes over their units and the occupancy certificate is issued and hence the applicant had no occasion to enter into any transaction for transferring his right, title or interest in respect of his share of the flats till the occupancy certificate is issued by the concerned authority. 5.2 In view of the above there is no liability upon the applicant Owner to pay GST in respect of the 40% of super built area received by the applicant, in terms of Notification No. 11/2017 Central Tax (Rate) da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the records that the applicant has entered into JDA, along with irrevocable general power of attorney, on 19.05.2016 with the Developer M/s. Suprabhat Constructions; Developer obtained necessary plan approval dated 21.02.2017, Commencement Certificate dated 16.06.2017 and the Completion / Occupancy Certificate dated 26.08.2019, from the authority BBMP. 6.5 The applicant contends that their share of residential flats have been handed over by the Developer to them only after the issuance of Occupancy competent certificate dated 26.08.2019 and the applicant has executed the sale deeds for sale of the said flats after the occupancy certificate dated 26.08.2019 and thus the transaction is not exigible to GST in terms of clause 5 to Schedule III of the CGST Act 2017, which specifies certain transactions to be treated neither as a supply of goods nor a supply of services and the same is appended below: 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building 6.6 Further Schedule Il to the CGST Act 2017 specifies certain activities / transactions to be treated as supply of goods / services. Clause 5(b) of the said schedule stipulates that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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