2024 (6) TMI 220

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....' located at Mohan Nagar, Ghaziabad and has obtained GST registration in the state of Uttar Pradesh for the purpose of construction and sale of the group housing project named 'Saviour Park'. 2. The applicant has sought advance ruling in respect of the following questions: 1. Whether selling of residential units in the project Saviour Park after 'deemed completion' or 'first occupation' in that phase (Phase IV) of the project is taxable or exempt Supply. 2. If answer to the above is affirmative, unit sold after which date shall be treated as exempt from GST. 3. The question is about applicable GST rate under the provisions of CGST Act and liability to pay GST, hence is admissible under Section 97 (2) (a) of the CGST Act 2017. Further, as per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant, 3. Statement of relevant facts having a bearing on the question(s) raised-: (a) That Savfab Buildtech Private Limited ('SBPL' or 'the Applicant') is an Indian company incorporated under Companies Act, 1956 (N....

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....A order 8208 / UP RERA / 20th Meeting / Office Order / 2019-20, the project shall be deemed to be completed. Copy of letter submitted to UP-RERA is enclosed. (j) After deemed completion, the applicant proceed to give possession of units to its customers and execute the sale deed. The first possession was given on 25.04.2023. Sale Deed of various customers has also been executed and possession has also been given to them. Out of the sale deed executed, copy of three sale deed and possession letter duly acknowledge by customers is enclosed, (k) That after 15 days, Ghaziabad Development Authority vide letter dated 27.04.2023, received on 02.05.2023, without taking into consideration the construction work, certificates and NOC of various authorities, denied to issue the completion certificate on account of solitary reason of pending dues of GDA in respect of certain development, FAR and other charges. Copy of letter received from GDA is enclosed. (l) That, charges imposed by GDA was under dispute and applicant had also filed writ petition before the Hon'ble Allahabad High Court in this regard. Hon'ble High Court disposing off the writ has directed to GDA to r....

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....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; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II • Section 9 (1) of CGST Act states as below (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. • Para 5 (b) of Schedule II of Central Goods And Services Tax Act, 2017 The following shall be treated as supply of services, namely:- (a) ............... (b) construction of a comple....

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....urther, it is submitted that schedule III of CGST Act, 2017, which states activities or transactions which shall be treated neither as a supply of goods nor a supply of services, includes Sale of land and, subject to paragraph 5 (b) of Schedule II, sale of building. Thus, sale of land and building is neither supply of goods nor supply of services. • Thus it is beyond doubt that GST is not levied on sale of immovable property. However, as per para 5 (b) of Schedule II of CGST Act, 2017, construction of a building intended for sale to a buyer 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, is a supply of service and hence GST is leviable. • Simply put, sale of any building during its construction before the completion or first occupation is excisable to GST. In other words, if completion certificate is received or first occupation is given in the building, GST shall not be levied. • The cardinal principle behind these provisions is that once completion certificate of a building is received or occupatio....

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....31-03-2019 and for which apartments have been booked on or before 31-03-2019 C. Completion certificate has been deemed approved • The applicant has completed the construction and applied for the completion certificate, after obtaining necessary approvals and NOCs as per the requirement, vide letter dated. 11.04.2023. Copy of letter has been enclosed. • However, neither any completion certificate was issued nor any intimation in this regard was received from GDA till 21 days. A letter dated 27.04.2023 was received on 02.05.2023 from GDA denying to issue completion certificate due to pending dues of applicant. Copy of letter received from GDA is enclosed. • It is further submitted that procedure for issuing completion/ occupation certificate is prescribed in Building Byelaws of Ghaziabad Development authority for building construction and development-2008, as amended till date (hereinafter referred to as 'Byelaws'). Chapter 3 of byelaws provides the conditions / necessities of building construction. • Para 3.1.8 of chapter 3 of Byelaws provides for issuance of completion / occupation certificate. As per the para 3.1.8 of byelaws,....

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....of UPRERA 16.09.2019, since the applicant didn't get * any intimation / communication from GDA till 21 days (15 working days) from the date of application and Thence the building for which application was submitted to GDA considered as deemed approved after expiry of 8 working days. Thus project was deemed approved on 21.04.2023. Accordingly the letter cum declaration was submitted to UPRERA by the applicant informing that project has been deemed to be completed. • Even for the sake of discussion, assuming without admitting, the letter received from GDA rejecting the application for completion certificate after the expiry of prescribed 8 working days is taken into consideration, the said letter is itself in violation of building bylaws of GDA and hence invalid on account of the reason discussed in ensuing paras. • A Combined reading of the para 3.1.8 and Annexure 2 of Building Byelaws of GDA, it is amply clear that on receiving application for completion certificate, Vice chairman or any officer authorised by him shall examine and accept the application and in case of construction work is found not in accordance with the approved map, shall reject the appl....

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....first occupation' of the project in accordance with laws, rules and regulations of State/Central Government or any other authority. • If literal meaning of the circular is comprehended, it treats 'first occupation' as per the law. As per law occupation cannot be given before completion I occupation certificate. If this interpretation is taken, the words 'or its first occupation whichever is earlier' become redundant. It is well settled that an interpretation which treats some words as otiose or redundant should not be adopted. • Even without prejudice to the above, the applicant has given the occupation of the building as per the law. The applicant, while discharging all its duties, applied for completion certificate to GDA. However no intimation was received from GDA within the prescribed time limit of 8 working days and accordingly the it was considered as deemed approved which has been explicitly specified in byelaw as well as supported by UPRERA order. Thus the applicant has given the occupation of the building in accordance with laws, rules and regulations of State/Central Government and Ghaziabad Development authority. E. Sale deed has been execut....

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....engineer has also been obtained by the applicant. • That certificate issued by architect or chartered engineer clearly states that building has been 100% constructed and completed. • Copy of certificate of Architect and Chartered Engineer is enclosed. 6. The application for advance ailing was forwarded to the Central Jurisdictional GST Officer vide letter dated 01.12.2023 to offer their comments/views/verification report on the matter. GST officer sent his comments vide letter dated 29.12.2023 and his observations are as under: 1. Phase IV of the project is separately registered under RERA vide RRA registration No. UPRERAPRJ7191 2. The date of first possession in Block Al and A2 of Phase IV of unit is 25.04.2023 & date of execution of first sale deed is 26.07.2023. 3. As per Ghaziabad Development Authority's bye laws as well as UPRERA order No. 8208/UPRERA/20th Meeting/office order/2019-20 dated 16.09.2019, the completion certificate should be issued within 8 working days from the receipt of the application in this regard which was submitted by the taxpayer to the Ghaziabad Development Authority on 11.04.2023. 4. Howe....

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....the application for consideration on merits. 11. On going through the documents provided by the party, the brief facts of the case are as under- The applicant i.e. Savfab Buildtech Private Limited. Plot No. 108, Katori Mill, Loni Road, Mohan Nagar Ghaziabad, U.P. is a registered assessee under GSTN No. 09AAOCS7407E2Z2. The Applicant is engaged in developing the project 'Saviour Park' having 1150 Units in aggregate. The said project has been divided into 4 phases. First Three Phases has already been completed and delivered to customers. Phase IV is having total 282 units and registered under RERA vide registration number UPRERAPRJ7191. The said phase was constructed and completed in two parts. Parts I of Phase IV having 169 units was already completed and delivered. Part II of Phase IV having 113 was under construction and has been completed in April 2023. That the construction of the 113 units in Phase IV was completed by the applicant in April 2023 and the applicant has also obtained certificates I NOC from various authority required far completion of building structure i.e Fire Safety NOC. Structure stability certificate, lift NOC, Electrical NOC. The applicant vid....

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....hose shall be treated as distinct projects. The applicant was engaged in the building of 1150 units in aggregate. The said project was divided in 4 phases. The first three phases have already been completed and delivered to the customers. The 4th phase was completed in two parts-169 units in one part and 113 units in second part. Here it may be pointed out that the applicant did not have any problem to obtain the completion certificate with respect to first three phases as well as with respect to Part 1 of phase 4. Since the 4th phase had separate registration, as per Board's clarification, the 4th phase will be treated as distinct project and will have to independently satisfy the requirements of the definition of ongoing projects. Thus the 4th Phase was an independent project and completion certificate was to be obtained for the same in order to treat it as sale of property. 13. As per the para 3.1.8 of Building Bye-laws of Ghaziabad Development Authority (Completion Certificate/Occupancy Certificate) is mandatory for the above project. As per Para 5 (b) of Schedule II of CGST act, in case of no-requirement of completion certificate from any authority, certificate from A....

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.... by the developer as proof of transfer of ownership. While a possession certificate signifying the transfer of possession whereas, an occupancy certificate is a green signal from local authorities that the property is fit for residence. The latter provides you with the official right to occupy the property, a guarantee not offered by the possession certificate. Thus, we find that letter of possessions cannot be substitute the occupation certificate. Thus, having letter of possessions or sale deed does not necessarily imply that "first occupation" has taken place. From the above it is clear, the Completion Certificate was denied to the applicant by GDA. Once, GDA denied Completion Certificate to the applicant. Hence, Completion Certificate cannot be said to be deemed approved. The 'first occupation' cannot be said to be taken either. Thus, the sale of residential units in Phase IV of the project by the applicant is not sale of immovable property but sale of services and thus GST is leviable. 14. In view of the above discussions, we, both the members unanimously rule as under; RULING Question 1: Whether selling of residential units in the project Saviour Park aft....

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....¨ को अस्वीकार करते हुए अपेक्षित संशोधनों सहित आवेदक को आवेदन करने के 08 कार्य दिवस में सूचित कर दिया जायेगा । ऐसा न करने की दशा में प्राधिकरण द्वारा पूर्णता प्रमाण पत्र स्वीकृत किया (डीम्ड एप्रूव्ड ) माना जायेगा । Document 2 अतः आवंटियों à....

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....र्टीफिकेट, 3 - स्ट्रक्चरल इंजीनियर सर्टीफिकेट तथा 4- लिफ्ट इन्स्टालेशन / सेफ्टी सर्टीफिकेट सहित सक्षम प्राधिकारी के समक्ष पूर्णता प्रमाण-पत्र के लिए आवेदन-पत्र प्रस्तुत कर दिया गया है और सक्षम प्राधिकारी द्वारा प्रोमोटर के आवेà¤....