Supply of building and related services and reporting in GST returns

[SANJAY JAIN]

Querry 1:

As per the entry number 5 of the schedule III of the CGST Act, Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building is not a Supply.

Hence if there is a sale of building after obtaining the completion certificate, it is not a supply.

In case a builder has both types of sale transactions, i.e. sale of the building before obtaining the completion certificate and sale of buildings after obtaining the completion certificate, he is required to charge GST only sale of the building before obtaining a completion certificate. Since the items of schedule III are not supply hence not required to be reported in GSTR-1 and GSTR 3B. Items covered in the scheduled III will also not to be reported in exempted and nill rated supply also.

Querry 2:

Sale and consumption of power are not covered in GST as same is part of entry no 53 of list II under Schedule VII, of Constitution of India.

In case a builder has given a commercial complex on rent. He has taken a single electrical connection and recovering the electricity expenses from all tenants of the building on prorate basis based on the number of units consumed, it will also not to be reported in GSTR 3B and GSTR-1 return.

Querry 3:

In case the booking of the flat was done during 2017 before the implementation of GST and service tax has been paid on the amount of advance received. If the buyer wants to cancel the booking now i.e before registration of property, whether the refund of service tax paid earlier can be claimed?/

Experts view are invited on above-mentioned queries.

AI Summary

Non-GST supply reporting: items outside supply must still be reported in returns as non-GST entries for compliance.
Sale of land and sale of building after a completion certificate are stated as not supply under Schedule III and therefore out of GST scope; nevertheless such transactions should be disclosed in GST returns under non-GST/non-supply reporting lines rather than as exempt or nil-rated supplies. Recharges of electricity to tenants on a prorata basis are similarly out of scope and to be reported accordingly. Refunds of prior service tax paid on advances may be claimable if the assessee issues a credit or disclaimer and procedural time limit rules of the original regime are observed.