2020 (2) TMI 554

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....orporation ('PMC') read with Development Control Regulations? b) If yes, what will be classification under GST and what will be applicable rate of GST? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to "GST Act" would means CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant is as under:- 2.1 The Applicant, Mr. Vilas Chandanmal Gandhi, was an owner of the land situated within the limits of PMC and wanted to develop the land jointly in collaboration with M/s. Amar Builders and Developers (Developer) and share the profits through distribution of sale proceeds after development of the land by way of construction of residential/ commercial project. 2.2 In terms of the said agreement entered into, between the applicant and the developer: â....

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....FSI. 2.9 In view of above, Applicant has applied for advance ruling and submitted before us that Sale of TDR/ Additional FSI does not amount to taxable supply under GST being in nature of transaction of sale of land/ immovable property and covered under Clause 5 of Schedule III of CGST Act. 2.9.1 Applicant has reproduced the definition of the term "goods" as defined in the CGST Act, 2017 and has submitted that the said definition includes the word 'moveable property' which has not been defined in the CGST Act. To understand the definition of the term 'movable property' , Applicant has cited Section 3 (36) of the General Clauses Act, 1897, Section 2 (9) of the Registration Act, 1908 and Section 22 of Indian Penal Code, 1860 and sub-section 102 of section 2 of CGST Act and has arrived at the conclusion that movable properties are covered in the definition of goods, and other than goods are covered within the ambit of services. 2.9.2 The applicant has further referred to various other legislations to explain the term 'immovable property', like, Section 3(4) of Bombay Land Revenue Code, 1879, Section 2(z) of the Real Estate (Regulation and Development) Act, 2016, etc. and has ....

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....oter were made taxable under reverse charge. Also, reference has been made to Notification no 6/2019-C.T. (Rate) dated 29.03.2019 prescribes that in case of a promoter who receives development rights against consideration in the form of construction service or against monetary consideration, GST liability shall arise on date of issuance of completion certificate. 3.6 In view of the above, applicant feels that the transactions of transfer of development rights are taxable under GST and to determine the rate of tax, the rate notification is required to be referred. 3.7 The GST rates for services have been prescribed in the Notification No. 11/2017- Central Tax (Rate), dated 28-6-2017 wherein there is no specific reference to the services of transfer of TDR/ Additional FSI 3.8 In Notification 4/2019-CT(Rate) dated 29 March 2019 i.e. notification providing that the service by way of transfer of development rights/ Additional FSI would be exempt subject to certain conditions, the heading of 9972 has been mentioned for the against the services by way of transfer of development rights. Hence the GST rate as applicable to heading 9972 would be applicable in the present case. Alter....

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....gulations. 5.2 We find that vide F. No. 354/32/2019-TRU dated the 14th May, 2019, the Government of India, Ministry of Finance, Department of Revenue (Tax Research Unit), New Delhi has issued FAQs (Part II) on real estate. Sr.No. 7 of the same is reproduced below:- Sr.No. Question Answer 7. In the formula prescribed under first proviso to Entry 41A of the Notification 12/2017- CT (R), as amended by Notification 4/2019 CT (R), what rate shall be taken to determine the value to be ascribed to the "GST Payable on TDR or FSI or both for construction of the residential apartments in the project but for exemption contained therein" as no specific rate has been prescribed in Notification 11/2017 CT-Rate or any other notification? What is the rate applicable to output supply of TDR or FSI? Whether the quantum of TDR or FSI (including additional FSI) or both shall be taken only in respect of un-booked apartments as on the date of issuance of Completion Certificate or first occupation of the project for the purpose of formula? The GST on transfer of development rights or FSI (including additional FSI) is payable at the rate of 18% (9% + 9%) with ITC under Sl. No. 1....