13.
2025 (3) TMI 1443 - APPELLATE AUTHORITY FOR ADVANCE RULING, TELANGANA - IN RE: M/S. MADDI SEETHA DEVI.
Receipt of consideration by the developer as per N/N. 04/2018-CT (Rate) dt.25.01.2018 or not - transfer of land or transfer of 'development rights' to the developer by the landowner - Whether the liability to pay GST or service tax as applicable arises on the developer immediately on receipt of development rights or immediately on conveyance of the flats to be constructed by way of an allotment letter?
Whether GST is applicable when consideration for the service was received prior to enactment of CGST Act, 2017 in the light of clause (b) of Section 142 (11) of GST Act, 2017? - HELD THAT:- The appellant is of opinion that since the JDA was entered on 01.01.2016 i.e., before introduction of GST, TDR attracts service tax for transfer of land by the appellant to the builder for the purpose of construction (para 14.3 of their appeal). It is observed that Advance Ruling Authority or Appellate Authority are constituted under the CGST/SGST Act, 2017 to provide clarification on matters under GST Act and Rules made thereunder. Section 97 (2) of the Chapter XVII provides for spectrum of issues on which the advance ruling can be sought for under the Act. Neither the Advance Ruling Authority nor this Appellate Authority have any jurisdiction to decide on the taxability under Finance Act, 1994. Therefore, the attempt of the appellant to seek a ruling to the effect that, in the facts of this case, the supply of TDR attracted Service Tax cannot be countenanced.
Whether GST is required to be paid when the developer has paid GST on the entire value of construction complex including the cost incurred for construction of flats to the landowner appellant? - HELD THAT:- The appellant has raised a query which is not posed before the Advance Ruling Authority. In terms of Section 101 (1) of CGST Act, 2017, the Appellate Authority can, after giving the parties to the appeal or reference an opportunity of being heard, pass such order as it thinks fit, confirming or modifying the ruling appealed against or referred to. Further, it is not open to the appellant to introduce new grounds in an appeal when admittedly these grounds were not raised before the original authority.
Hon'ble Supreme Court has in the case of Commissioner of Cust & C Ex, Goa vs Dempo Engineering Works Ltd. [2015 (4) TMI 961 - SUPREME COURT], held that Tribunal cannot allow an appeal on new grounds when the same were neither raised in reply to the show cause notice nor were argued before the Adjudicating Authority - Thus, when a question is not raised before the Advance Ruling Authority, the Appellate Authority cannot entertain the same in appeal.
Conclusion - i) The transfer of development rights is considered as receipt of consideration by the developer. ii) GST liability arises at the time of transfer of possession or rights in the constructed property, not at the time of receipt of development rights.
The appeal is dismissed and the impugned ruling of Advance Ruling Authority is upheld.
No.- AAAR. COM/12/2022, Order-in-Appeal No. AAAR/03/2025
Dated.- February 20, 2025