GST Time of Supply Ruling for Flats - Possession Date Key

The Authority ruled that the time of supply and point of taxation for flats allotted before GST but constructed during GST is determined by the date of transfer of possession, leading to tax liability on that day. The date of the supplementary agreement does not dictate the service tax payment date; it should align with the time of supply ruling. Compliance requires payment based on the time of supply ruling, not the supplementary agreement date. The definition of "Constructed complex" was clarified as a completed building or structure. The ruling addressed these issues for M/s. Vajra Infracorp India Private Limited, disposing of their application.

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Issues:
1. Time of supply and point of taxation regarding flats allotted before GST but constructed during GST.
2. Date of allotment for payment of service tax.
3. Compliance with service tax payment.
4. Impact on future projects.
5. Definition of "Constructed complex" in the notification.

Issue 1: Time of supply and point of taxation regarding flats allotted before GST but constructed during GST:
The applicant sought clarification on the time of supply and point of taxation for flats allotted before GST but constructed during GST. The Authority analyzed the Notification No.4/2018 and ruled that the date of transfer of possession of the building or the right in it to the person supplying development rights determines the time of supply and liability to pay tax. The liability arises on the day of transfer, as per the notification.

Issue 2: Date of allotment for payment of service tax:
The applicant inquired if the date of the supplementary agreement should be considered as the date of allotment for service tax payment, despite construction continuing from May 2017 to November 2018. The Authority clarified that tax payment should align with the time of supply indicated in the ruling for Issue 1.

Issue 3: Compliance with service tax payment:
Regarding sufficient compliance with service tax payment, the Authority reiterated that the applicant must pay tax in accordance with the time of supply determined in Issue 1, dismissing the notion of remitting tax based on the supplementary agreement date.

Issue 4: Impact on future projects:
The question of the impact on future projects due to the transitional period did not arise in the ruling, as it was not deemed relevant to the current case.

Issue 5: Definition of "Constructed complex" in the notification:
The Authority clarified that "Constructed complex" refers to a building or a completed structure, providing a clear definition for the term used in the notification.

Overall, the ruling provided by the Authority addressed the applicant's queries regarding the time of supply, tax liability, compliance with service tax payment, and the definition of "Constructed complex" in the context of the GST regime. The application by M/s. Vajra Infracorp India Private Limited was disposed of based on the rulings issued by the Authority.

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