9911796707
TMI Blog2024 (6) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... has obtained GST registration in the state of Uttar Pradesh for the purpose of construction and sale of the group housing project named 'Saviour Park'. 2. The applicant has sought advance ruling in respect of the following questions: 1. Whether selling of residential units in the project Saviour Park after 'deemed completion' or 'first occupation' in that phase (Phase IV) of the project is taxable or exempt Supply. 2. If answer to the above is affirmative, unit sold after which date shall be treated as exempt from GST. 3. The question is about applicable GST rate under the provisions of CGST Act and liability to pay GST, hence is admissible under Section 97 (2) (a) of the CGST Act 2017. Further, as per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant, 3. Statement of relevant facts having a bearing on the question(s) raised-: (a) That Savfab Buildtech Private Limited ('SBPL' or 'the Applicant') is an Indian company incorporated under Companies Act, 1956 (Now repealed by Companies Act, 2013) and is engaged in developing a group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to UP-RERA is enclosed. (j) After deemed completion, the applicant proceed to give possession of units to its customers and execute the sale deed. The first possession was given on 25.04.2023. Sale Deed of various customers has also been executed and possession has also been given to them. Out of the sale deed executed, copy of three sale deed and possession letter duly acknowledge by customers is enclosed, (k) That after 15 days, Ghaziabad Development Authority vide letter dated 27.04.2023, received on 02.05.2023, without taking into consideration the construction work, certificates and NOC of various authorities, denied to issue the completion certificate on account of solitary reason of pending dues of GDA in respect of certain development, FAR and other charges. Copy of letter received from GDA is enclosed. (l) That, charges imposed by GDA was under dispute and applicant had also filed writ petition before the Hon'ble Allahabad High Court in this regard. Hon'ble High Court disposing off the writ has directed to GDA to reassess the charges as per the applicable law. Copy of order passed by the Hon'ble High Court is enclosed. (m) Some relevant date of first possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II * Section 9 (1) of CGST Act states as below (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. * Para 5 (b) of Schedule II of Central Goods And Services Tax Act, 2017 The following shall be treated as supply of services, namely:- (a) ............... (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CGST Act, 2017, construction of a building intended for sale to a buyer except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier, is a supply of service and hence GST is leviable. * Simply put, sale of any building during its construction before the completion or first occupation is excisable to GST. In other words, if completion certificate is received or first occupation is given in the building, GST shall not be levied. * The cardinal principle behind these provisions is that once completion certificate of a building is received or occupation of building is given, it becomes immovable property. B. Phase IV in the project is separately registered under RERA and a distinct project * The applicant has started the construction of Phase TV in Jan 2018. Tn phase TV there was total 282 units. Out of 282 units, 169 was completed in Dec 2022 for which partial NOC was applied with GDA. Remaining 113 units has been completed in April 2023. * At the outset it is submitted that the Applicant is limiting its submissions to the 113 units which was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to issue completion certificate due to pending dues of applicant. Copy of letter received from GDA is enclosed. * It is further submitted that procedure for issuing completion/ occupation certificate is prescribed in Building Byelaws of Ghaziabad Development authority for building construction and development-2008, as amended till date (hereinafter referred to as 'Byelaws'). Chapter 3 of byelaws provides the conditions / necessities of building construction. * Para 3.1.8 of chapter 3 of Byelaws provides for issuance of completion / occupation certificate. As per the para 3.1.8 of byelaws, after completion of construction work, concerned person shall inform to GDA in form 'A' as per Appendix 6 along with copy of sanctioned MAP in compact Disc (CD). Detailed process of issuance of completion certificate is specified in annexure 2 of Bye laws. Copy of Chapter 3 of Building byelaws of GDA, which prescribed condition for building construction, is enclosed. * In Annexure 2 of Building byelaws of GDA, detailed procedure of completion certificate has been prescribed. Para 5 of Annexure 2, which prescribed the process of rejection of completion certificate, clearly states within 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 8 working days is taken into consideration, the said letter is itself in violation of building bylaws of GDA and hence invalid on account of the reason discussed in ensuing paras. * A Combined reading of the para 3.1.8 and Annexure 2 of Building Byelaws of GDA, it is amply clear that on receiving application for completion certificate, Vice chairman or any officer authorised by him shall examine and accept the application and in case of construction work is found not in accordance with the approved map, shall reject the application and inform to applicant within 8 working days along with required modification. * In the present case, application was neither examined as per rules laid down in byelaws nor any construction at site was examined and nor completion certificate was denied on ground of deviation / deficiency in construction work from approved maps. * That fact that application has been rejected by GDA without any cogent reason and in baseless manner can also be established from that fact that that letter states nothing about any modification required in construction which is also a prerequisite to reject the application as per the building byelaws of GDA. * It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was received from GDA within the prescribed time limit of 8 working days and accordingly the it was considered as deemed approved which has been explicitly specified in byelaw as well as supported by UPRERA order. Thus the applicant has given the occupation of the building in accordance with laws, rules and regulations of State/Central Government and Ghaziabad Development authority. E. Sale deed has been executed and registered with the registrar * It is also submitted that as per section 17 (1) (b) of Registration Act, Non-testamentary Instrument purport to create, declare, assign, limit or extinguish any right, title or interest of the value of over Rs. 100 in immovable property requires compulsory registration with Registrar or Sub-Registrar appointed by Government. * Thus, as per Indian registration act, 1908, any instrument (sale deed in the present case), for transferring title in immovable property having value of more than Rs. 100, requires compulsory registration with registrar or sub-registrar. * As per section 2 (6) of Registration Act, 1908, Immovable property includes any land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20th Meeting/office order/2019-20 dated 16.09.2019, the completion certificate should be issued within 8 working days from the receipt of the application in this regard which was submitted by the taxpayer to the Ghaziabad Development Authority on 11.04.2023. 4. However, no completion certificate was issued by the Ghaziabad Development Authority within stipulated time as prescribed bye laws of Ghaziabad Development Authority /UPRERA Order, but a letter dated 27.04.2023 received on 02.05.2023 by the taxpayer denying to issue the completion certificate on account of solitary reason of pending dues of GDA in respect of certain development charges, FAR and other charges. However, as per bye laws of GDA completion certificate can only be denied if the development/ construction of project is not as per the approved MAP 5. In our view, the date of first sale deed 26.07.2023 may be considered as date of first occupation in terms of clause (b) of paragraph 5 of Schedule II. 7. The applicant was granted personal hearings on 10.01.2024 which was attended by Mr. Anuj Garg, CA, Authorized Representative during which they reiterated the submissions made in the application of advance ruling. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the applicant has also obtained certificates I NOC from various authority required far completion of building structure i.e Fire Safety NOC. Structure stability certificate, lift NOC, Electrical NOC. The applicant vide letter dated 11.04.2023 has applied to Ghaziabad Development Authority for issuance of completion certificate of 113 units in block A1 and A2 enclosing copy of Fire Safety NOC, Structure stability certificate, lift NOC, Electrical NOC, RWH-certificate etc.. Applicant has submitted that the letter received from GDA rejecting the application for completion certificate after the expiry of prescribed 8 working days is taken into consideration; the said letter is itself in violation of building bylaws of GDA. But the Ghaziabad Development Authority vide letter C.No. 212/ प्रवर्तन खंड जोन-7/2023 dated 27.04.2023 denied to issue the completion certificate on account of solitary reason of pending dues of GDA in respect of certain development. The applicant has relied on the order no. 8208/UPRERA/20th Meeting/office order/2019-20 dated 16.09.2019 of UP RERA regarding deemed approved by c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate) is mandatory for the above project. As per Para 5 (b) of Schedule II of CGST act, in case of no-requirement of completion certificate from any authority, certificate from Architect, Chartered Engineer or licenced surveyor can be obtained. Since, completion certificate from GDA is required for the project, the certificate from Architect, Chartered Engineer or licenced surveyor is not applicable. As per the clause (zf) of section 2 of UP RERA Act:- "occupancy certificate" means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity. The term first occupation has been defined in Subject: FAQs on real estate-reg issued vide F. No. 354/32/2019-TRU dated 7th May, 2019 by Tax Research Unit, Department of revenue as under: The term 'first occupation" appearing in Schedule II para 5 (b) and in notification No. 11/2017 - Central Tax (Rate) dated 29-03-2019 means the first occupation of the project in accordance with the laws, rules and regulations laid down by the Cent ..... 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