AI Drafter 
TaxTMI 
TaxTMI 
2021 (8) TMI 536
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....ssued there under. 3. Brief facts of the case: 3.1. The applicant was established in the year 1999 with the charter for policy advocacy in favour of housing and real estate. They are the prime knowledge sharing forum for latest industry data, technological advancements and industry benchmarks. They have emerged as the preferred platform with regard to national discourse on housing and habitat through strong networking with Government, policy makers, investors, financial institutions and real estate developers. 3.2. In the light of the evolving provisions of goods and services tax the members of the applicant engaged in the activity of construction and sale of apartments have queries regarding the date of completion of an apartment within the State of Kerala for the purpose of determining whether the transaction of sale of apartment would be treated as supply attracting GST liability under the CGST Act. 4. Accordingly, the applicant requested advance ruling on the following; 1. Whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated a supply to determine GST liability, if the agreement for sale of the apartment ....
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.... certificate in the Form Appendix F2 as per Rule 20 of the Kerala Municipality Building Rules, 2019? 6. Post 08.11.2019, what would be the date of completion of an apartment constructed within the State of Kerala for the purpose of determining whether the transaction of sale of apartment would be treated as supply attracting GST liability? 5. Contentions of the Applicant: 5.1. Scope of supply for levy of GST is covered under Section 7 of the CGST Act which reads as follows; "7. Scope of supply- (1) For the purposes of this Act, the expression - "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration; (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated....
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.... (a) renting of immovable property; (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, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation-For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely: - (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "construction" includes additions, alterations, replacements or remodelling of any existing ci....
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.... prior to 08.11.2019, Rule 22 of the KMBR, 1999 deals with completion certificate, development certificate and occupancy certificate. The relevant portion of Rule 22 of the KMBR, 1999 reads as follows; "22. Completion certificate, development certificate and occupancy certificate. - (1) Every owner shall, on completion of the development or redevelopment of land or construction or reconstruction or addition or alteration of building, as per the permit issued to him, submit a completion certificate certified and signed by him, to the Secretary in the form in Appendix E: Provided that in the case of buildings, other than single residential units up to two floors with total floor area not exceeding 150 sq. meters, the completion certificate shall be certified and signed by the owner and registered architect or engineer or supervisor also as in Appendix F. (2) The Secretary shall, on receipt of the completion certificate and on being satisfied that the development or redevelopment of land has been effected in conformity with the permit given, issue a development certificate in the form in Appendix G, not later than 15 days from the date of receipt of....
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....en carried out in conformity with the permit given, issue occupancy certificate in the form in Appendix F2 not later than fifteen days from the date of receipt of the completion certificate: ....................................................................... Provided further that if no such occupancy certificate is issued within the said fifteen days, the owner may proceed as if such occupancy certificate has been duly issued to him. On the expiry of fifteen clear days from the date of valid application for occupancy certificate, the applicant shall submit a letter stating that he is liable to get occupancy certificate and now it is deemed to have issued by the authority. All Secretaries of Local Self Government Institutions shall acknowledge the receipt of the letter stated in the above paragraph with stamp and date on the same day on the duplicate copy of the letter. This shall be a deemed occupancy certificate. 5.12. From the above extracted provisions, it may be understood that in the case of residential buildings having more than two floors and total built-up area exceeding 150 Sq.mtrs, the completion certificate is a certificate issu....
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....in form Appendix E3 to the KMBR, 2019 as applicable during the relevant period. Therefore, obtaining the said certificate marks the completion of the project in question and the date of the certificate shall be the date of completion of the project. 5.17. In view of the above, they are of the bonafide belief that the completion certificate obtained by a builder from a Registered Architect / Building Designer / Engineer / Supervisor as the case may be in form Appendix F to KMBR, 1999 or in form Appendix E3 to the KMBR, 2019 as applicable, upon completion of the project is sufficient to satisfy the requirement of obtaining a completion certificate under sub- clause (b) of paragraph 5 of Schedule II to the CGST Act. Therefore, the date of completion of construction for the purpose of determining whether the activity is to be treated as supply of service under sub-clause (b) of paragraph 5 of Schedule II of the CGST Act is the date of issue of completion certificate. 5.18. Therefore, if the consideration towards sale of apartment is received after obtaining completion certificate from a Registered Architect / Building Designer / Engineer / Supervisor as the case may be in form Ap....
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....ection 7 read with Paragraph 5 (b) of Schedule II of the CGST Act. Therefore, the issue to be determined is what constitutes the completion certificate as mentioned in clause (b) of Paragraph 5 of Schedule II of the CGST Act and when such completion certificate would be said to have been issued. 8.2. Paragraph 5 (b) of Schedule II of the CGST Act is reproduced below; "(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, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation -For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely: - (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or (ii)....
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....g satisfied that the development or redevelopment of land has been effected in conformity with the permit given, issue a development certificate in the form in Appendix G, not later than 15 days from the date of receipt of the completion certificate; Provided that if no such development certificate is received within the said fifteen days, the owner may proceed as if such a development certificate has been duly issued to him. (3) The Secretary shall, on receipt of the completion certificate and on being satisfied that the construction or reconstruction or addition or alteration has been carried out in conformity with the permit given, issue occupancy certificate in the form in Appendix H not later than fifteen days from the date of receipt of the completion certificate: Provided that if no such occupancy certificate is issued within the said fifteen days, the owner may proceed as if such occupancy certificate has been duly issued to him. (4) The owner of a building may if he intends to occupy the building before its completion, apply to the Secretary for that purpose and the Secretary shall, on being satisfied that such occupancy will not endange....
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....ys from the date of receipt of the completion certificate: Provided that, in case there is deficiency as per provisions of these Rules, in minimum width of mandatory open space/ yard after completion of the construction, other than the distance stipulated as per section 383A of the Kerala Municipality Act, 1994 (20 of 1994) and sub-rule (5) of rule 81 of these rules, the Secretary may allow a tolerance up to 5% of the minimum mandatory open space/ yard to be provided as per these rules or twenty five centimeters, whichever is less, for the building constructed: Provided further that if no such occupancy certificate is issued within the said fifteen days, the owner may proceed as if such occupancy certificate has been duly issued to him. On the expiry of fifteen clear days from the date of valid application for occupancy certificate, the applicant shall submit a letter stating that he is liable to get occupancy certificate and now it is deemed to have issued by the authority. All Secretaries of Local Self Government Institutions shall acknowledge the receipt of the letter stated in the above paragraph with stamp and date on the same day on the dup....
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....addition or alteration of building or erection of telecommunication tower or pole structure or work under the permit No. ..................dated..............................issued to and supervised by has been inspected by me and that the work executed is in accordance with the permit and the building / tower or pole structure is now fit for occupation/use. Place: Date: Signature of the Secretary 8.6. On a combined reading of the above provisions and the prescribed formats; it is clear that the completion certificate in respect of the construction of a building or civil structure in the State of Kerala is the certificate prescribed in sub-rule (1) of Rule 22 and Rule 20 respectively of the KMBR, 1999 and KMBR, 2019. On the basis of the discussion above, we conclude that the completion certificate under any law for the time being in force mentioned in clause (b) of Paragraph 5 of Schedule II of the CGST Act, in so far as the State of Kerala is concerned is the certificate in form in Appendix F prescribed under proviso to sub-rule (1) of Rule 22 of the KMBR, 1999 or the certificate in form in Appendix E3 prescribed under proviso to sub-rule (1) of Ru....
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....date of completion of an apartment constructed within the State of Kerala for the purpose of determining whether the transaction of sale of apartment would be treated as supply attracting GST liability? The date of issue of completion certificate for the purpose of clause (b) of Paragraph 5 of Schedule II of the CGST Act shall be the date of issue of the completion certificate in form in Appendix F submitted to the Secretary as per Rule 22 of the Kerala Municipality Building Rules,1999. 4. Whether post 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated a supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after submission of completion certificate in Form Appendix E3 issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in Form Appendix F2 as per Rule 20 of the Kerala Municipality Building Rules, 2019 but before expiry of 15 days from the date of such submission? If the entire consideration in respect of the transaction is received after submission....