Completion certificate timing under GST determines whether apartment sale consideration is taxable or outside supply treatment in Kerala.

For apartment sales in Kerala, construction intended for sale is treated as a supply of services under Schedule II of the CGST Act unless the entire consideration is received after submission of the prescribed completion certificate to the competent municipal authority. The relevant completion certificate is the one required under the applicable Kerala Municipality Building Rules: Appendix F under the 1999 Rules and Appendix E3 under the 2019 Rules. For GST purposes, completion is taken as the date on which that prescribed certificate is submitted to the Secretary. Where consideration is received only after that submission, the transaction falls outside GST as a taxable supply.

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Issues: Whether, for apartment sales in Kerala, receipt of the entire consideration after submission of the prescribed completion certificate under the applicable building rules would take the transaction outside GST, and what date constitutes completion for the purposes of clause (b) of paragraph 5 of Schedule II of the Central Goods and Services Tax Act, 2017.

Analysis: The taxable event under Section 7 of the Central Goods and Services Tax Act, 2017 depends on whether the transaction amounts to a supply. Construction of a building intended for sale is treated as a supply of services under paragraph 5(b) of Schedule II, except where the entire consideration is received after issuance of the completion certificate by the competent authority. The expression completion certificate in that provision must be understood with reference to the law governing construction in the State concerned. Under the Kerala Municipality Building Rules, 1999, the relevant completion certificate is the certificate in Appendix F submitted to the Secretary under Rule 22. Under the Kerala Municipality Building Rules, 2019, the corresponding completion certificate is the certificate in Appendix E3 submitted to the Secretary under Rule 20. The date of completion for GST purposes is therefore the date on which that prescribed completion certificate is submitted to the Secretary.

Conclusion: Receipt of the entire consideration after submission of the prescribed completion certificate under Rule 22 of the Kerala Municipality Building Rules, 1999 or Rule 20 of the Kerala Municipality Building Rules, 2019 does not amount to a taxable supply under GST, and the completion date is the date of submission of that completion certificate.

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