TaxTMI 
TaxTMI 
2018 (10) TMI 1054
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....cant is required to organise construction of GPRA (i.e. dwelling units), GPOA (i.e. office spaces), commercial space and supporting infrastructure, such as local convenience shopping centre, banquet hall/ community centre, creche, schools, hospital/dispensary, ATM/Banks, parking facilities, parks and play grounds etc. at the specified locations in place of old existing buildings. The applicant is also required to maintain the constructed buildings for thirty years after construction. The transaction between the applicant and MoHUA under the said MOU is not a subject matter before this authority. 2. As per the MOU dated 25.10.2016, the estimated cost of abovementioned redevelopment work and maintenance thereof for thirty years is Rs. 24,682 crores which shall be met from free-hold sale of specified commercial built-up area. The sale proceeds of commercial built-up area shall be deposited in an escrow account which shall be managed by Capital Management Committee constituted by MoHUA. Capital Management Committee shall review the status of the escrow account on yearly basis, determine the amount, accrued in excess of 20% of the total cost of the said redevelopment work which is re....
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....-up space on behalf of the Government in the colonies under redevelopment. 8. A person is liable to pay GST on its transactions which are falling within the "scope of supply" as prescribed in section 7 of CGST Act as reproduced below: (1) For the purposes of this Act, the expression "supply" includes- (a) all farms of supply of goods or services or bath such as sale, transfer, barter, exchange, licence, rental, lease or dispasal made or agreed to be made far a consideration by a person in the course are furtherance of business; (b) impart of services for a consideration whether or not in the course are furtherance of business; (c) the activities specified in Schedule l, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goads or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1), - (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be n....
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.... 11. From a combined reading of section 2(107), which defines "taxable person", and sections 2(105), 22 and 24 of the CGST Act, it can be appreciated that a supplier of goods or services is a taxable person. Hence, ordinarily, supplier of goods or services is liable to pay tax on the consideration received by him. Therefore, it is necessary to examine the documents describing the transaction to understand who are the supplier and the receiver. The applicant has to perform its activities as per the MOU signed on 25.10.2016 with MoHUA. In terms of the MOU, the applicant is responsible for development of the area for MoHUA by constructing of dwelling units, commercial space and supporting infrastructure and maintaining thereof for thirty years. The applicant has no interest in the area constructed by it except receiving its remuneration prescribed in MOU. For the work assigned to the applicant, the applicant is entitled to receive cost plus 8% of such cost from MoHUA. The total cost of the development has been estimated Rs. 24,682 crores and, MoHUA has decided to recover such cost by selling built-up area in commercial building. The MOU states that applicant shall invest up to Rs. 15....
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....submits that it cannot be held responsible for payment of GST merely because it is registered under Real Estate Regulation Act (RERA), 2016, as promotor of the said project. The applicant has received a letter dated 14.09.2017 from MoHUA, in which the Ministry has asked it to apply for registration under RERA as promotor. It has taken registration under RERA being a representative of MoHUA. In fact, the applicant cannot be construed as promotor under RERA. The provision of section 2(zk) of the Act is reproduced below: (zk) "promoter" means,- (i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or (ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or (iii) any development authority or any other public body in respect of....
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....r the applicant case, is given below: Notification No. 12/2017-Central Tax (Rate) New Delhi, the 28th June, 2017 In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:- Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 4 Chapter 99 Services by Central Government, State Government, Union territory, local authority or governmental authority by way of any activity in relatio....
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....l justice and performance of functions and implementation of schemes as may be entrusted to them. Further, these functions may include matters listed in Twelfth Schedule of the Constitution. Twelfth Schedule contains the following activities. (a) Urban planning including town planning. (b) Regulation of land-use and construction of buildings. (c) Planning for economic and social development. (d) Roads and bridges. (e) Water supply for domestic, industrial and commercial purposes. (f) Public health, sanitation conservancy and solid waste management. (g) Fire services. (h) Urban forestry, protection of the environment and promotion of ecological aspects. (i) Safeguarding the interests of weaker sections of society, including the handicapped & mentally retarded. (j) Slum improvement and upgradation. (k) Urban poverty alleviation. (l) Provision of urban amenities and facilities such as parks, gardens, playgrounds. (m) Promotion of cultural, educational and aesthetic aspects. (n) Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. (o) Cattle pounds; prevention of cruelty to animals. (p) V....
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....ident from the extracts of relevant portions from Maharashtra Regional and Town Planning Act, 1966. 33. Plans for areas of Comprehensive development:- (1) Any time after the publication of notice regarding preparation of draft Development plan under section 26, a Planning Authority may prepare plan or plans showing proposals for the development of an area or areas which in the opinion of the Planning Authority should be developed or re-developed as a whale (hereinafter referred to as "the area or areas of Comprehensive development"); and in particular such plans shall provide far:- (a) detailed development of specific areas for urban renewal, housing shopping centres, industrial areas, civic centres, educational and cultural institutions; (b) central of architectural features, elevation and front age of buildings and structures; (c) dealing satisfactorily with areas of bad layouts, obsolete development and slum areas and re-location of population; (d) open spaces, gardens, playgrounds and recreation areas. (2) When the plans for an area or areas of Comprehensive development are prepared, whether or not separately, the Planning Authority ....
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....1) 3 SCC 91 = 1990 (9) TMI 349 - SUPREME COURT. Here, Jalgaon Municipal Council contemplated erection of an Administrative Building and commercial complex on a piece of its land for better use of the same. The construction of the project was to be done through a developer at his own cost and he was to handover certain constructed space to the municipality free of cost. The developer was free to sell his share of the space and the allottees (buyers) were to be given occupancy right for a period of 50 year under section 272 (1) of Maharashtra Municipalities Act, 1965. They were expected to pay rents to the Municipal Council for a period of 50 years at the rate prescribed in the scheme. The project was awarded to a real estate developer by the Municipality through competitive bidding. However, this was challenged by the appellants in the Bombay High Court on the following grounds: (a) That the scheme of financing of the project was unconventional and was not one that was, as a matter of policy, open and permissible to a governmental authority. The municipal authority could either have put up the construction itself departmentally or awarded the execution of the whole project to a b....
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....conomic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority. in the ever increasing tempo of urban life and the emerging stresses and strains of planning, wide range of policy options not inconsistent with the objectives of the statute should be held permissible. Therefore, in the context of expanding exigencies of urban planning it will be difficult for the court to say that a particular policy option was better than another. The contention that the project is ultra vires the powers of the Municipal Council is not acceptable. 23. Therefore, MoHUA is also not liable to pay GST on sale of commercial built-up space, as this relates to function entrusted to a municipality under Article 243W of the Constitution. The applicant is not liable to pay GST on sale of built-up space prior to 01.07.2017. 24. The applicant submits that some built-up space has already been sold thr....
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.... comparison of the exemption provision under the two laws, it is evident that under the Service Tax Law, exemption was given to service provided by a governmental authority, whereas such exemption has been given to Central Government, State Government, Union Territory, local authority or governmental authority under the GST Law. In other words, Central Government, State Government etc. have been added in the exemption notification under the GST Law. Under Service Tax Law, exemption was granted to governmental authority, a subset of Government, but not to the Government. There was an obvious anomaly. This anomaly has been removed in the subsequent GST legislations. In Gem Granites v. Commr of I.-T., Tamil Nadu" AIR 2005 SC 1455 = 2004 (11) TMI 13 - SUPREME COURT, relying upon its decision in Municipal Committee v. Manilal 1967(2) SCR 100 = 1966 (11) TMI 87 - SUPREME COURT OF INDIA and Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P. 1998 (7) SCC 228 = 1998 (10) TMI 452 - SUPREME COURT OF INDIA, the Supreme court has held that subsequent legislation may be looked into to fix the proper interpretation to be put on the statutory provisions as stood earlier. Therefore, it ca....
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....cult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity. 28. In CIT vs. B.C. Srinivasa Setty, 1981 (128) ITR 294 SC = 1981 (2) TMI 1 - SUPREME COURT, the Supreme Court, with reference to section 45 of the Income Tax Act, 1961, has held that when there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section by observing as follows: Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head. No existing principle or provision at variance with them can be applied for determining the chargeable profits and gains. All transactions encompassed by s. 45 must fall under the governance of its computation provisions. A transaction to which those provisions cannot be applied must be regarded as never intended by s. 45 to be the subject of the charge. This inference flows from the general arrangement of the provisions in the I.T. Act, where under each head of ....
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....e Ill of the Act. In Schedule Ill, activities or transactions which shall be treated neither as a supply of goods nor supply of service are specified. In paragraph 5 of Schedule Ill, 'sale of land and, subject clause (b) of paragraph (5) of Schedule II, sale of building" has been mentioned. Hence, the transaction of sale of units in constructed buildings is transaction of sale of building and, therefore, covered in paragraph 5 of Schedule III of the Act. 31. It is relevant to mention that the transaction in the present case is not covered in clause (b) of paragraph (5) of schedule Il of the Act and, therefore, it is not excluded from paragraph 5 of Schedule III. Clause (b) of paragraph (5) of the Schedule II is reproduced below: SCHEDULE Il ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 5. Supply of services The following shall be treated as supply of services, namely: - (a)****** (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, ....
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....SCC 209 = 2004 (5) TMI 296 - SUPREME COURT OF INDIA, the assessee wanted to take advantage of the extended meaning of sale in Article 366(29A)(b) by applying it to the expression "sale" appearing in M.P. Entry Tax Act, 1976. The Supreme Court held that the legal fiction applicable to Entry 54 cannot be applied to Entry 52 covering entry tax. 34. During the hearing, the applicant has given additional submissions wherein they have mentioned the following case law to support their various contentions: i. Navi Mumbai Municipal Mazdoor Union vs. The State of Maharashtra [judgement dated 1^st October 2014 in Writ Petition No. 2720/2013] = 2014 (10) TMI 986 - BOMBAY HIGH COURT - Under Article 243W, State Legislature may endow municipalities with powers and responsibilities in regard to planning, economic development, social justice, etc. [Para 36, 37] ii. Farzana Khan vs. Municipal Corporation of Greater Mumbai, 2018 SCC Online Bom 314 = 2018 (3) TMI 1654 - BOMBAY HIGH COURT - Under Maharashtra Regional Urban Planning Act, 1966, municipalities are entrusted with duties of town planning for planned development of urban areas. "Development" means inter alia building, enginee....
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....ntract as a builder or contractor, therefore liable to pay GST on sale of build up property. The municipality clause mentioned by the dealer is not applicable to him, which is clear on plain reading of Article 243W of the Constitution. Comments of Jurisdictional Officer (CGST): 38. The applicant in the case is NBCC (India) Limited and not the MoHUA and therefore it appears that the question asked in respect of MoHUA should not be admissible for advance Ruling in terms of Section 95 and 97 of the CGST Act. 39. As per Para 6(a) of Schedule Il of the CGST Act, 2017, Works Contract Service shall be treated as supply of services. Thus, there is no dispute as to whether or not Works Contract Service is supply of service. As per notification 11/2017-Central Tax (Rate) dated 28.06.2017, services provided to Central Government or State Governments by construction/ repair/ maintenance has been taxed at Nil rate of Central Tax, except for those cases where the construction is meant to be for commerce, industry or any other business or profession. In the instant case, as M/s. NBCC India Limited will construct and sell built-up space for commercial purposes such as shop, schools, etc.,....
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....y GST on consideration received under an agreement to sale of units in a building under construction, para 5(b) of Schedule Il of the CGST Act, 2017 clearly states that only that construction activity is exempt where consideration has been received after issuance of completion certificate or after its first occupation, whichever, is earlier. Regarding Composite Works Contract, when the land is a part of the construction of complex or building, only two-thirds of the consideration shall be treated as taxable value. 47. In view of above, the applicant is liable to pay GST on consideration received under an agreement to sale of constructed units in a building which is under construction. RELEVANT NOTIFICATIONS: 48. S. No. 4 and 6 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 and parallel SGST and IGST notifications: S.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) Condition (1) (2) (3) (4) (5) 4 Chapter 99 Services by Central Government, State Government, Union territory, authority or governmental authority by way of any activity in relation to any function entrusted to ....
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....le 243Q of the Constitution of India, only Nagar Panchayats, Municipal Councils and Municipal Corporations are considered as Municipalities. However, jn certain urban areas, called industrial townships, an industrial establishment may provide municipal services and a Municipality may not be constituted in that urban area. However, it appears that Ministry of Housing and Urban Affairs (MoHUA) or NBCC are not covered in Article 243Q either as a Municipality or as an industrial establishment for a notified industrial township in place of a Municipality. 54. The Article 243W of the Constitution of India reads as under: 243W Powers, authority and responsibilities of Municipalities etc. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to- (i) the preparation of plans for economic development and social justice....
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....hose which are in relation to matters listed in the Twelfth Schedule. The construction of huge commercial complex are not covered in Article 243W or in Twelfth Schedule of the Constitution. DISCUSSIONS: 57. The applicant, M/s. NBCC (India) Limited has been appointed as implementing/executing agency by the Ministry of Housing and Urban Affairs (MoHUA), Government of India, for re-development of Nauroji Nagar, Sarojini Nagar and Netaji Nagar colonies in Delhi. The applicant is required to organise construction of GPRA (i.e. General Pool Residential Accommodation), GPOA (i.e General Pool Office Accommodation), commercial built-up space/area and supporting infrastructure such as local convenience shopping centre, banquet hall/community centre, creche, schools, hospitals/dispensary, ATM/Banks, parking facilities, parks and playgrounds etc. in place of old existing buildings. The applicant is also required to maintain the constructed buildings for thirty years after construction. However, the present application for Advance Ruling is only regarding GST liability on freehold sale of commercial built-up space to general public. 58. The terms and conditions of Memorandum of Underst....
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....shall be met from free hold sale of commercial BIJA in Nauroji Nagar (25 acres with BIJA of 2,97,000 sqm), parts of Sarojini Nagar (42 acres with BIJA of 5,09,990 sqm), and surplus Shops built as a part of Social Infrastructure in seven GPRA colonies executed by CPWD and NBCC, after keeping aside requisite number of shops for the existing allottees in all the colonies. 58.7 The sale shall be conducted through transparent bidding system using e-auction. 58.8 If the amount realised from the sale is not enough to meet the cost of construction, maintenance costs for 30 years and NBCC's investment with interest, then up to 10% of residential BIJA is to be sold by NBCC on free hold basis for further revenue generation. However, sale of residential space may be avoided. 58.9 NBCC shall invest upto Rs. 1,500 crore into the project from own funds, in phases, as and when required or as directed by the Capital Management Committee. NBCC is entitled to a fixed interest @ 12% per annum on their investment till it is returned. The investment along with interest shall be returned by MoHUA to NBCC from the amount realised through sale of commercial BIJA. 58.10 The entire proceeds from ....
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....POA including social infrastructures, on submission of a detailed proposal by NBCC. The power to incur expenditure shall be delegated to NBCC in respect of colonies developed by them. CMC should be approached only in case of additional works beyond the amount approved for annual general maintenance. (ii) Common & other services of saleable commercial built-up area: The regular maintenance of saleable built up area shall be on chargeable basis at the prevailing market rates in terms of per sft. area as mutually agreed and decided with the occupants/buyers. A sinking fund will be created from onetime lump sum payments from buyers for replacement of plant and equipment, special repairs and value additions during maintenance period. 58.15 The milestones with respect to time schedules will be fixed for completion of project. For any delay, attributable to Project Management Consultant (PMC), NBCC is liable to pay penalty at the rate of Rs. 5.00 per sq. feet per month on delayed uncompleted work, subject to overall limit of 10% of the agency charges of NBCC. 58.16 NBCC will incorporate advanced state of art technologies during construction, minimizing the pollution hazard, impro....
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....contractors engaged for the construction. 60.4 NBCC shall execute the project only after getting building plans approved as per the statutory requirements and after approval of design by the Empowered Committee. 60.5 NBCC shall obtain environmental clearance for the redevelopment work in three colonies assigned to them from SEIAA, Delhi. 60.6 The supervision of all the works shall be done by the NBCC, which shall strictly adhere to the quality norms applicable as per specifications, IS codes, National Building Codes etc. 60.7 NBCC would be responsible for maintenance of the assets, services of the GPRA & GPOA including supporting social infrastructure (including special repairs) for a period of 30 years. The expenditure shall be met from the Maintenance Corpus Fund created from the sale proceeds. 60.8 The regular maintenance of saleable built up area shall be done by NBCC on chargeable basis in terms of per sft. area at the prevailing market rates, as mutually agreed and decided with the occupants/buyers. 60.9 NBCC shall handover the completed structures and services of GPRA complex & GPOA including Social Infrastructure facilities along with inventory of fixtures....
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.... credited to the Escrow Account. 66. NBCC shall open and maintain separate Books of Accounts for each colony to be redeveloped by them. NBCC shall submit quarterly returns of the physical and financial progress of the project to MoHUA in the format prescribed by the CMC. 67. The ownership of GPRA and GPOA including social infrastructure shall continue to be with the Government of India and these shall be handed over to the Government after completion. 68. After completion and commissioning of the redevelopment project, any surplus funds available shall be deposited into the Consolidated Fund of India. 69. The Jurisdictional Officer (CGST) has argued that the applicant is M/S NBCC (India) Limited and not the MoHUA and therefore the question no. 2 i.e. whether MoHUA is required to pay GST or not, should not be admissible for advance ruling in terms of Section 95 and 97 of the CGST Act. 70. The above view of the Jurisdictional officer (CGST) has been considered. However, ruling in respect of question no. 1 i.e. whether NBCC (India) Limited is required to pay GST or not, cannot be given unless taxability of the sale of commercial units is also decided. Hence, question no....
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....e applicant is an executing,/implementing agent of the MoHUA. 74. However, the allotment letter/demand letter to the successful bidder is to be issued by the applicant. Also, as per the terms and conditions of Sale, any amount towards GST on payment shall also be payable by the allottee/buyer to the applicant. 75. The MOU between the MoHUA & NBCC is not on Principal-to-Principal basis. It is also not on partnership /joint venture /collaboration basis. There is no mutual revenue, profit or loss sharing arrangement between the two. The applicant is not acquiring any right or interest in the project. It is not selling the commercial built-up units on its own account. The applicant is simply acting as an agent of MoHUA. 76. Section 2(5) of the CGST Act, 2017 reads as follows: "agent" means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another; 77. Since, it is admitted by the applicant that they are constructing and selling the commercial built-up space on behalf of the Minis....
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....of persons shall be required to be registered under this Act,- (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise; 85. From the above, it is observed that under Explanation (i) to Section 22 and Clause (vii) of Section 24 of the CGST Act, 2017, the applicant is compulsorily required to be registered while acting as an agent for supply of services. 86. Hence, the applicant can be called 'taxable person' as per Section 2(107) of the CGST Act, 2017. 87. From the combined reading of Sections 2(5), 2(105), 2(107), 22 and 24 of the CGST Act, 2017, it is clear that the applicant is covered in the definitions of "Agent", "Supplier" and "Taxable Person" in respect of the said project while providing services on behalf of the Ministry of Housing and Urban Affairs. Further, the applicant is falling under the categories of persons under Section 22 and also under Section 24 requiring compulsory registration in respect of the said project. 88. Hence, the contention of the applicant that they cannot be construed as "supplier" of service as they are selling the commercial built up space on behalf of ....
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....missible only if such services are provided by a "governmental authority". 94. The expression "governmental authority" has not been defined in Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 but the same has been defined in Explanation to Clause (16) of Section 2 of the IGST Act, 2017 as follows: Explanation.-For the purposes of this clause, the expression "governmental authority" means an authority or a board or any other body, (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution; 95. Hence, a "governmental authority" must be set up or established specifically to carry out any function entrusted to a municipality under Article 243W of the Constitution. However, MoHUA has not been established for the purposes of discharging functions entrusted to Municipalities. Hence, the Ministry of Housing and Urban Affairs (MoHUA) does not appear to be covered in the definition of 'governmental authority' and impugned services rendered by MoHU....
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.... that in the case of G.B. Mahajan and Others vs. Jalgaon Municipal Council and Others, (1991) 3 SCC 91 = 1990 (9) TMI 349 - SUPREME COURT, the legality of construction of a commercial complex by a Municipality has been upheld by the Hon'ble Supreme Court of India. However, the said judgment is not relevant in the present case as the said judgement pertains to a case where construction of a Central Administrative building intended to be used by the Municipal Council for locating its own offices and an adjacent structure to be used as a vegetable market and a commercial complex on a plot of land owned by the Municipality was being executed through a Developer of real estate using his own funds and which was challenged on the argument that the local authority instead of executing the project itself had wrongly entered into an agreement with the developer for its financing and execution. The said judgement does not deal with the issue of scope of Article 243 W or Twelfth Schedule of the Constitution of India. 102. The applicant has also mentioned para 36 and 37 of the decision of the Hon'ble Bombay High Court in Civil Writ Petition No. 2720/2013 in the case of Navi Mumbai Municpal M....
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....on was not discussed. Hence, the said judgement is not relevant in the present case. 105. Similarly, in para 7, 8 and 10 of the Judgement of Hon'ble Supreme Court in the case of Nagarpalika Parishad vs State of UP reported in 2010 SCC online All 1959 = 2010 (10) TMI 1184 - ALLAHABAD HIGH COURT, the issue was whether Additional District Magistrate was empowered to restrain the Municipality from auction of shops. The scope of activities covered under Article 243W or Twelfth Schedule of the Constitution was not subject matter of the judgment. Hence, the said judgement is not relevant in the present case. 106. It has been submitted by the applicant during the hearing that as per Section 42 of the Delhi Municipal Corporation Act, 1957, the obligatory functions of the Corporation includes: (k) the construction and maintenance of municipal markets and slaughter houses and the regulation of all markets and slaughter houses. (wa) the preparation of plans for economic development and social justice. (x) the fulfilment of any other obligation imposed by or under this Act or any other law for the time being in force. 107. Section 43 of the Delhi Municipal Corporation Act, 195....
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....ndia (Allocation of Business) Rules, 1961 has allocated wide ranging functions to the Ministry of Housing and Urban Affairs. However, it cannot be said that such responsibilities relates to functions entrusted to municipalities under Article 243W and Twelfth Schedule to the Constitution of India. 114. In view of the above, it is held that services for commercial built-up space by the Ministry of Housing & Urban Affairs (MoHUA) are not covered in Twelfth Schedule r/w Article 243W of the Constitution of India and hence not exempted from payment of GST under S. No. 4 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. Further, from 26.07.2018, the exemption is limited to services supplied by the Governmental Authorities. Also, the said services are not covered in S. No. 6 of the said Notification. Question No. 3 115. The third issue for decision is whether the commercial built up area against which a part of the consideration has been received prior to 01.07.2017 i.e. prior to the appointed date of 01.07.2017 defined under Section 2(10) of the CGST Act, 2017, can be subjected to GST on the amount received on or after 01.07.2017 or not. 116. It is observed th....
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....under Section 93 (1) of Finance Act, 1994. The scope of the said Section 93 of the said Act, was limited to grant of exemption provided the service tax was leviable under Section 66/66B of the Finance Act, 1994. It was held that the abatement to the extent of 75% or 70% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract. 120. The reliance of the applicant on the judgement of the Hon'ble High Court of Delhi in the case of Shri Suresh Kumar Bansal v/s Union of India = 2016 (6) TMI 192 - DELHI HIGH COURT is entirely misplaced. Firstly, the said case pertains to provisions of Section 67 of the Finance Act, 1994, Rule 2A of the Service Tax (Determination of value) Rules, 2006 and Notification No. 26/2012 - ST dated 20.06.2012 whereas the present application for advance ruling is regarding various provisions of the CGST Act, 2017. 121. The claim of the applicant that such sale of commercial space was exempted from payment of Service Tax under S. No. 39 of Notification No. 25/2012 - ST dated 20.06.2012 is not being examined as the same is beyond the jurisdiction of this Auth....
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.... in respect of the property under construction (for which neither occupancy certificate was received nor it is yet to be occupied) - Service tax is/was payable on the consideration received @15% on 1/4th of the consideration; and there would be no GST on the same. (Sec. 142(11)(b)- refers); (ii) when a part of the consideration was received prior to 30.06.2017 from the customers in respect of the property under construction (for which neither occupancy certificate was received nor it is yet to be occupied) - Service tax (ST) is/was payable on the consideration received prior to 01.07.2017 i.e.: @15% on 1/4th of the consideration; and there would be no GST to the extent of that amount for which ST was paid/payable. For the remaining consideration paid/payable on or after 01.07.2017, GST is payable with reference to the date of payment of the balance amount or the date of invoice issued by the builder, whichever is earlier (generally invoice reckons to the payment milestones as per the agreement between the builder/developer and the buyer). (iii) In respect of an ongoing construction project (for which neither occupancy certificate was received nor it is yet to be occupied), wh....
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....fter its first occupation, whichever is earlier, will be treated as Supply of Services. 128. It is observed that during Service Tax regime, an Explanation was inserted by the Finance Act, 2010 in the definition of taxable service of 'Construction of Complex' and 'Commercial or Industrial Construction Service' [section 65(105)(zzzh) and 65(105)(zzq)]. Thereby, the construction of buildings intended for sale wholly or partially by builder or other person authorized by builder before, during or after construction was deemed to be service provided by builder to the buyer. The Explanation provided that in case entire sum is received from the prospective buyers after grant of completion certificate by the authorities competent to issue such certificate, it shall not be a taxable service. In such case, since the sale takes place after completion of building, it will be considered as sale of immovable property. The Declared Service in section 66E(b) is basically to continue levy of tax on construction of premises by a builder, which is intended for sale to a buyer. 129. The above explanation was challenged in the case of Maharashtra Chamber of Housing Industry v/s Union of India [rep....