2023 (10) TMI 787

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....ance Ruling, the expression 'GST Act' would be a common reference to both CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act' 2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act' 2017. 4. BRIEF FACTS OF THE CASE: 4.1 The applicant, Vaishnaoi Infratech and Developers Private Limited, is a company registered under The Companies Act, 1956 and is a registered taxpayer (hereinafter referred to as Applicant) engaged in the business of real estate development. 4.2 It is submitted that, the applicant is engaged in the business of development of plots by purchasing the land from land owners or/and taking the land from other land owners by entering into development agreemen....

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....ent rights by the land owner in consideration of land development services received is taxable or not under the provisions of the GST Acts? If taxable, whether the applicant is liable to pay GST under RCM basis on the development rights received from the land owners or whether the land owner is only liable to pay GST on such transfer of development rights. What is the applicable. 6. PERSONAL HEARING: The Authorized representatives of the unit namely Sri. M. Ramachandra Murthy, Advocate & AR attended the personal hearing held on 24.05.2023. The authorized representatives reiterated their averments in the application. Further, the Authorised Representative/Applicant M/s. Vaishnaoi Infratech And Developers Private Limited, reiterated that their case /Similar Case is not pending in any proceedings in the applicant's case under any of the provision of the Act and have not already decided in any proceedings in the applicant's case under any of the provisions of the Act. 7. DISCUSSION & FINDINGS: a. The applicant in the annexure 1 to form GST ARA-01 has raised five questions at Para 3 of the statement of relevant facts the same are clarified as follows: Question 1 : W....

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....erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract'. The supply of works contract service to customers as well as land owners, who have transferred the development rights to the applicant, is taxable at the rate of 9% CGST & 9% SGST as sub entry - xii of entry at serial no. 3 with SAC 9954 of the notification 11/2017. d. Question 3: Whether transfer of development rights by the land owner in consideration of land development services received is taxable or not under the provisions of the GST Acts? If taxable, whether the applicant is liable to pay GST under RCM basis on the development rights received from the land owners or whether the land owner is only liable to pay GST on such transfer of development rights. What is the applicable Notification and entry in the Notification? Clarification: Notification 12/2017 is amended vide notification 4/2019 dt: 29.03.2019 to inserted Sl.No. 41A in the exemption for the purpose of exempting "Transfer Of Developm....

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....ctures 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"; ........... Thus the Transfer of Development Rights by the land owner to the applicant is taxable under the CGST & SGST Acts at the hands of the recipient promoter, i.e., the applicant, of these rights. The rate of tax is 9% on CGST & SGST respectively as residuary entry as mentioned in Circular No. 164/20/2021 dt: 06.10.2021 at Para no. 9.3.2. The applicant can claim input tax credit of the same while discharging the liability to pay tax on development services provided by him. e. Question 4: If transfer of development rights and development of plot service are liable for GST, how to arrive at the value of supply of such services for payment of GST. How much value of land has to deducted for levying tax? Clarification: Where the value of works contract is separately specified w.r.t development undertaken on land by way of altering the immovable property, such amount shall be the value of supply exigible to tax as determined under Sec 15 of the CGST Act. However if the value of the work....