AI Drafter 
TaxTMI 
TaxTMI 
2022 (10) TMI 773
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....sued there under. 3. The Applicant has requested for advance ruling on the following; I. Applicability of a notification issued under the provisions of the Act. II. Determination of time and value of supply of goods or services or both, III. Determination of the liability to pay tax on any goods or services or both, IV. Whether any particular thing done by the applicant with respect to any goods and / or services or both amounts to or results in a supply of goods and / or services or both, within the meaning of that term. 4. Contentions of the Applicant: 4.1. The applicant submits that they enter into two agreements with the customers who want to have an apartment in their project. Firstly, an agreement for sale of undivided share of the land is executed between the company and the customer in which a particular number of undivided shares are agreed to be sold to the customer based on the square feet of the apartment proposed to be purchased by the customer. Along with the said agreement, another agreement for constructing the apartment is also executed between the company and the customer entrusting the work of constructing the apartmen....
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....Notification No.11/2017-CT(Rate) dated 28.06.2017 as amended by Notification No.03/2019-CT (Rate) dated 29.03.2019 they have filed Annexure - IV and have declared to the department that they are collecting and paying tax at the rate of 18% [Old rate]. There is no objection by the department till date for this action of the applicant. The applicant has informed that instead of collecting 12% for the gross amount, they are collecting 18% on the charges for construction agreement. The tax payment appears to be correct. The Jurisdictional Officer has further stated that no proceedings in the questions raised in the case of the applicant are decided or pending. 6. Personal Hearing: 6.1. The applicant was granted an opportunity for a personal hearing on 05.11.2021. Shri Thomas John and Shri Hamsa Mohammed represented the applicant in the personal hearing. They submitted additional documents and reiterated the contentions made in the application and requested to issue a ruling based on the submissions in the application. 7. Discussion and Findings: 7.1. We have gone through the application and the submissions of the applicant during the personal hearing. The questions to be an....
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.... sub-item(d) and sub-item (da) of item (v); and sub-item (c) of item (vi), against serial number 3 of the Table, in respect of which the promoter has exercised option to pay central tax on construction of apartments at the rates as specified for this item. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) (if) Construction of a complex, building, civil structure or a part thereof including, - (i) commercial apartments (shops, offices, godowns etc) by a promoter in a REP other than RREP, (ii) residential apartments in an ongoing project, other than affordable residential apartments, in respect of which the promoter has exercised option to pay central tax on construction of apartments at the rates as specified for this item in the manner prescribed herein, but excluding supply by way of services specified at items (i), (ia), (ib), (ic), (id) and(ie) above 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. ....
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....- Economically Weaker Section (EWS) houses constructed under the Affordable Housing in Partnership by State or local authority or urban development authority under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban); (e) Sl. No. 3 (iv) (db) - Credit Linked Subsidy Scheme for Economically Weaker Sections (EWS) / Lower Income Group (LIG) / Middle Income Group -1 (MIG-1) / Middle Income Group - 2 (MIG-2) under the Housing for All (Urban) Mission / Pradhan Mantri Awas Yojana (Urban); (f) Sl. No. 3 (v) (c) - Low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (g) SI. No. 3 (v) (d) - Low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under-1) The "Affordable Housing in Partnership" component of the Housing for All (Urban) Mission / Pradhan Mantri Awas Yojana; 2) Any housing scheme of a State Government. (h) SI. No. 3 (v) (da) - Low-cost ho....
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....) and (b) above, construction of a project shall be considered to have started on or before the 31st March 2019, if the earthwork for site preparation for the project has been completed and excavation for foundation has started on or before the 31st March 2019. (xxix) "Residential apartment" shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority." 7.8. The relevant clauses of Section 2 of the Real Estate (Regulation and Development) Act, 2016 which contains the definition of the tee ins 'apartment', `promoter' and 'real estate project' are reproduced below; "(e) "apartment" whether called block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit, tenement, unit or by any other name, means a separate and self-contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof in a building or on a plot of land, used or intended to be used for any residential or commercial use such as residence, office, shop, showroom or godown or for carrying on any business, occupation, ....
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....the rate of tax on the construction of an apartment under the schemes specified in various sub-items of Item (iv), (v) and (vi) of SI No. 3 as enumerated therein and Item (if) of SI No. 3 of the said notification prescribes the rate of tax on the construction of residential apartments other than affordable residential apartments in an ongoing project in respect of which the promoter has exercised option to pay tax at the rates as specified under the item. The condition prescribed for continuing with the payment of tax at the old rates in respect of ongoing projects was that the registered person shall exercise within the prescribed time an option in the prescribed form to pay tax on the construction of apartments in the project at the rates as specified for Item (ie) or (if) of Si No. 3 of the said notification. 7.10. From the facts as disclosed in the application and from the remarks of the jurisdictional officer, it is evident the project of the applicant satisfies all the conditions of the definition of "ongoing project" in clause (xx) of Para 4 of the said notification and accordingly the applicant is eligible for filing option for continuing with the payment of tax at the o....
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....paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include,- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e....
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....Para 2 of the said notification, the taxable value in respect of the service specified at item (if) of Sl.No. 3 of the said notification is the total amount charged for the supply less the value of land or undivided share of land and the value of land or undivided share of land shall be deemed to be one-third of the total amount charged for the supply. As per the valuation mechanism prescribed in paragraph 2 of the said notification, the value of land or undivided share of land is deemed to be one-third of the total amount charged for the supply irrespective of the actual value of land and accordingly the applicant is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply. 7.12. The next question raised by the applicant before the authority is regarding the time of supply of service. The time of supply of services is governed by the provisions of Section 13 of the CGST which reads as follows; "Time of supply of services. - (1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section. (2) The time of supply o....
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....is earlier. (4) In case of supply of vouchers by a supplier, the time of supply shall be, (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases. (5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall, - (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid. (6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value." 7.12.1. Further Notification No.06/2019 Central Tax (Rate) dated 29.03.2019 prescribes that in respect of the following categories of registered persons, namely; (i) a promoter who receives development rights or Floor Space Index (FSI) (including additional FSI) on or after 1st April, 2019 for construction of a pr....