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TMI Blog2022 (10) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... the following: i) Whether the portion of apartments constructed by Developers and allotted to the Land Owners as part of a joint development arrangement between the Developers and the Land Owners would be treated as supply liable to GST? ii) If the allotment of apartments of Land Owners by the Developers as part of a joint development arrangement is treated as a supply and liable to GST, what is the value to be adopted for the purpose of computing GST liability? iii) If the allotment of apartments to Land Owners by the Developers as part of a joint development arrangement is treated as a supply and liable to GST, what is the time of supply in such a transaction and when does the GST liability arise? iv) If the allotment of apartments to Land Owners by the Developers as part of a joint development arrangement is treated as a supply and liable to GST, what is the rate of GST applicable? 4. Contentions of the Applicant: 4.1. The applicant submits that they are the prime knowledge sharing forum for latest industry data, technological advancements and industry bench marks. They have emerged as the preferred platform with regard to national discourse on housing and habitat thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as a supply, the value on which GST is to be discharged for the said transaction shall be determined in accordance with Section 15 (1) of the CGST / SGST Act. According to Section 15 (1) of the CGST / SGST Act, the value of supply of goods or services or both shall be the transaction value, where the supplier and the recipient of the supply are not related and the price is the sold consideration for the supply. Since the parties are unrelated and since no consideration is flowing from the land owners to the developer, the value of supply would be zero and no GST is payable by the developer. 4.3. Regarding question no.2 it is submitted without prejudice to the above submission, that if this authority is of the view that the developer is liable to discharge GST and that value has to be determined by applying Section 15 (4) of the CGST /SGST Act where value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined by resorting to the valuation rules. Rule 27 of the CGST / Kerala SGST Rules, 2017, lay down the method of determination of value of supply of goods or services where the consideration is not wholly in money. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CGST / SGT Rules, then the value shall be the sum total of consideration in money and such further amount in money that is equivalent to consideration not in money as determined by the application of Rule 30 or Rule 31 in that order. 4.7. Therefore, as per the provisions laid down under Rule 30 of the CGST / SGT Rules, if the allotment of apartments to land owners by the applicant as part of the joint development arrangement is treated as a supply and liable to GST the value of construction services provided to the land owners in a joint development arrangement shall be one hundred and ten percent of the cost of construction. Should the arrangement between the land owners and the developer be liable to GST, the time of supply is to be determined under sub-section (2) of Section 13 of the CGST / SGST Act. As per Section 13(2)(a) and Section 13 (2) (b) of the CGST / SGST Act, the time of supply is date of invoice / date of provision of service or date of receipt of payment whichever is earlier. In the present arrangement, since there is no invoice or payment, Section 13 (2) (a) and Section 13 (2) (b) of the CGST / SGST Act will not apply. Consequently, section 13 (2)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o GST, what is the value to be adopted for the purpose of computing GST liability? 3. If the allotment of apartments to Land Owners by the Developers as part of a joint development arrangement is treated as a supply and liable to GST, what is the time of supply in such a transaction and when does the GST liability arise? 4. If the allotment of apartments to Land Owners by the Developers as part of a joint development arrangement is treated as a supply and liable to GST, what is the rate of GST applicable? 7.2. It is stated by the applicant that several members of the applicant are engaged in joint venture development for construction and sale of apartments and the members of the applicant entering into joint development arrangements with land owners have queries regarding the implication of GST on the land owner's entitlement to a portion of the constructed apartment and hence the application. Therefore, the questions raised by the applicant are in respect of the activities undertaken by the members of the applicant. Therefore, it is necessary to examine the provisions governing advance ruling in the CGST Act, 2017. 7.3. Section 95(a) of the CGST Act defines the term "adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant can make an application for advance ruling if the following conditions are satisfied; (1) the applicant is either registered under GST law or is desirous of obtaining registration; (2) the matter or question pertains to any issue specified in Section 97 (2); (3) such a transaction is being undertaken or proposed to be undertaken by the applicant and the advance ruling is binding only on the applicant and the jurisdictional officer of the applicant. 7.7. In the instant case the questions raised by the applicant pertains to the GST liability of the activity undertaken by the developers; who are the members of the applicant; i.e., the applicability of GST on the supplies made by third persons and not in respect of any supply undertaken or proposed to be undertaken by the applicant. As discussed above, the provisions of the CGST Act governing advance ruling does not provide for an applicant to seek a ruling regarding the applicability of the provisions of the Act or the notification issued there under to a third person other than the applicant. 7.8. Admittedly, the applicant has preferred this application on behalf of the members of the applicant and hence the application i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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