TaxTMI 
TaxTMI 
2019 (8) TMI 472
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....n respect of the following questions: Applicability of GST on partially completed fiats i.e. a) Partially completed flats having identified customers before GST regime b) Partially completed flats, where customers are identified after implementation of GST regime, and c) Partially completed flats, where no customers are identified. 3. The applicant company furnishes some facts relevant to the stated activity: 3.1 The Applicant is engaged in construction and sale of residential apartments and residential complex based under joint development agreement. 3.2 The Applicant have executed projects under JDA with Land Owners for an agreed ratio of built-up area, Construction was commenced during pre-GST regime and also continued under GST regime, out of which substantial portion of the work has been sub-contracted to another registered person. 3.3 The Applicant submits, their understanding of law and consequently their view points, on the issue raised by them, that construction activities relating to immovable property have been treated as "Works Contract" under the GST Law; construction and sale of residential flats falls ....
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....mer, and attract tax under GST law on the value of work executed under GST Law only from the stage of entering agreement with customer. PERSONAL HEARING: / PROCEEDINGS HELD ON 21.05.2018. 4. Sri. Sanjay M Dhariwal, Chartered Accountant at M/s Dhariwal & Sreenivas; Bengaluru, on authorization issued by Sri Navneet Jhunjhunwala, Director of the Company, appeared as Authorised representative of the company for personal hearing proceedings on 21.05.2018, before this authority and reiterated the facts narrated in their application. The applicant also submitted copies of the following documents during personal hearing. (a) Commencement certificate issued by local authority (BBMP) (b) Copy of completion certificate containing Status of project i.e. percentage of completion obtained from Chartered Engineer. (c) Copy of application filed before the local authority (BBMP) seeking issuance of Occupany Certificate. (d) Copy of Hon'ble Apex Court decision in Larsen and Toubro Limited & another Vs State of Karnataka & another [2013] 65 VST 1. 5. FINDINGS & DISCUSSION 5.1 We have considered the submissions made by the Applicant in their applicat....
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....dered during the currency of the said Finance Act. In other words service tax is liable to be paid on the services provided up to 30.06.2017. Also the GST is liable to be paid under the CGST /KGST Act 2017, on the services provided after 01.07.2017. Therefore We are of the opinion that the Applicant has to pay service tax / GST proportionate to the services provided before / after 30.06.2017 respectively. 5.5 The Applicant's questions are customer Centric i.e. the customer is identified in pre-GST regime, post-GST regime and not identified in either regime. The Applicant means by "identification of customer" that the agreement has been entered into with the customer for construction of particular flat. We now consider each of the questions one at a time. 5.6 It is pertinent to first discuss the taxability of works contract service. In terms of para 5(b) of Schedule II to the CGST Act 2017, construction activity is not leviable to GST where the entire consideration has been received after issuance of completion certificate, where required, by the Competent Authority or its first occupation, whichever is earlier. In other words the supply would amount to sale of building/fl....
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....lue of the work carried out after the appointed date. 5.10 We have considered the contention of the applicant in relation to the value of supply in relation to the second question. We do not agree to the applicants view point. The applicant had not entered into any agreement with the customer prior to 01.07.2017. Therefore there was no event of supply to anyone. The applicant was engaged in the activity of construction on his own account. In this regard we draw reference to Section 15 of the CGST Act, 2017. Section 15(1) provides that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the Supplier and the recipients are not related and the price is the sole consideration for the supply. It is apparent from the aforesaid provision that the value to be adopted for the computation of tax amount has to be the transaction value, i.e. the value at which the supply has been agreed upon. Therefore the applicants view in this regard is not correct and we do not accept the same. 5.11. The third question is with regard to applicability of GST on Partially comp....