TaxTMI 
TaxTMI 
TaxTMI 
Sale of immovable property treated as 'Supply'
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....ale of immovable property treated as 'Supply'<br> Query (Issue) Started By: - NANDAKUMAR KONKAR Dated:- 31-1-2017 Last Reply Date:- 4-2-2017 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>Under MGST Law, Clause 5 (b) of Schedule II [transactions to be treated as 'Supply'] states that : "construction of a complex, building, civil structure or a part thereof, including a compl....
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....ex 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 before its first occupation, whichever is earlier." broadly construed to mean that transfer of property under construction (where entire consideration has been received after issuance of ....
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....completion certificate) shall be treated as supply of services & by implication, transfer of completed structures are outside purview of Supply & consequently, of GST levy. The above clause is borrowed from sec 66 (E)(b) of 'Declared Services' of Finance Act, 1994, except for the 2nd exception: "or before its first occupation, whichever is earlier". My query is:is first occupat....
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....ion exception linked with receipt of entire consideration or not? If yes, it means sale of building is not a supply if: entire consideration is received either (a) after issuance of Completion Certificate [CC] or (b) before 1st occupation, whichever is earlier. This seems confusing. Does it mean that when entire consideration is received before 1st occupation, it would not be a supply. So rega....
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....rdless of whether entire consideration is paid by buyer after CC or before 1st occupation, it would not be a supply. Alternately, if first occupation exception is not linked with receipt of entire consideration, it could mean in cases of occupation before issuance of CC, transaction would not be supply. Kindly clarify CA Nandakumar Konkar Reply By KASTURI SETHI: The Reply: Dear Sir, Note th....
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....e words, "In GST there is no separate meaning for goods and services." written by Sh.M.Govindarajan, Sir in his article dated 1.2.17. Reply By KASTURI SETHI: The Reply: Pl. read "Goods or Services" instead of "goods and services". Reply By NANDAKUMAR KONKAR: The Reply: Sir, My query is not whether sale of immovable property is 'goods' or ;services', b....
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....ut whether the 2nd exception relating to 1st occupation is linked with receipt of entire consideration or not. Regards CA Nandakumar Konkar Reply By KASTURI SETHI: The Reply: Dear Sir, I am expressing my views what I understand:- ST is leviable if property is under construction and not treated as sale of goods unless completion certificate is there(in draft GST now "or first occupatio....
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....n" also proposed to be added). It means here consideration is received before property/building is ready for sale. Hence service. ST is not leviable in case of property is sold where completion certificate is there and entire consideration is received afterwards. So the emphasis is on " whether entire consideration is received "Before Or After" completion of property. It i....
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....s natural that first occupation will also be after completion of the property. So the essence of definition remains the same whether pre-GST era (at present) or after proposed GST era.<br> Discussion Forum - Knowledge Sharing ....