2025 (6) TMI 1233
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....epresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (hereinafter referred to as the 'Act') are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. 1. At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matters and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017. 2. M/s. Sripriya Constructions Private Limited, located Ground Floor, No. G-1, No.30, Door No. 60/12A, Kamadhenu Flat, K.K.....
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....following information "If and When a 'Sale Deed' is prepared concerning the scheduled property for registering an apartment, kindly indicate if it is required to mention the 'Composite value' of the property. 4.3 The Sub-Registrar, Virugambakkam vide letter dated 16.07.2024 has replied as follows: "In the documents falls under first sale category as per G.O.Ms.No.131/C.T.& RE (J1) dated 01.12.2023 and IGR Circular No.45438/L1/2023 dated 01.12.2023 and 14.12.2023, composite value to be follow". 4.4 A perusal of the reply under RTI would indicate that for the purpose of registration of UDS, the composite value of the built up area would also have to be taken into account. The natural analogy on the aforesaid would be that the value of building would also be taken into account while registering the land (UDS area in this case) notwithstanding the fact that the construction would be executed not by the landowner but by the applicant. In other words, the applicant holds that the entire value represents the sale of land despite the element of construction of built-up area by the applicant. INTERPRETATION OF LAW BY THE APPLICANT: 5. On interpretation of law, the applicant has reit....
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....e deed would be sufficient ground to claim clause (5) of Schedule-III of the CGST/ TNGST Act resulting in non-liability on the hands of the applicant on the construction of built-up area notwithstanding the fact that the same is treated as 'Sale of Land' (including Building). During the personal * hearing, AR furnished additional submissions along with copies of sale deed, related documents and case law in support of their claim. DISCUSSION AND FINDINGS 9.1 We have carefully considered the provisions of the law, submissions made by the Applicant in their application, copies of the relevant documents furnished by them, the submissions made during the personal hearing, and the comments furnished by the jurisdictional tax officers. 9.2 From the application filed by the applicant, it is seen that they are seeking advance ruling, on the following question: Whether this execution of Sale Deed by the land owner for the UDS area covering the built up area to be constructed by the Querist would be sufficient ground to claim exclusion as sale of land under Item No.5 of Schedule III of the CGST Act / TNGST Act resulting in non-liability in the hands of the Applicant of on the constructio....
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....01.12.2023, Tamil Nadu. 10.3 Based on the said circular, the applicant has executed single sale deed on composite value (sum of land value and building value) on behalf of landlord through general power of attorney granted by the landlord vide copies of sale deed document No.1344/2025, dated 03.02.2025 and document No. 1211/2025, dated 25.02.2025 with the Sub-Registrar Office (SRO)/Virugambakkam. 10.4 In this backdrop, the applicant has raised question as to whether the execution of Sale Deed by the landowner for the UDS area including the built up area constructed by the applicant would be sufficient ground to claim exclusion as sale of land under Item No.5 of Schedule III of the CGST/TNGST Act resulting in non-liability in the hands of the Applicant on the construction of built up area to the buyers for the sale of apartment that were allocated to them as per the Joint Venture Development Agreement. 11. Before going into the merits of the case, whether the activity of the applicant qualifies as supply under GST Act. As per entry 5(b) of Schedule II of CGST/TNGST Act 2017, construction of a complex, building, civil structure or part thereof, including a complex or building in....
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....cifies any on-going project or project which commences on or after 1st April, 2019. 13.1 There are basically two types of JDA namely, (a) Area sharing JDA and (b) Revenue Sharing JDA. The parties involved in the JDA is the land owner and Developer/builder. In a JDA, the land owner has to transfer its developmental rights to the developer and in return the land owner gets continuous supply of construction service from the developer and GST is applicable at the time of supplying such construction service. For a residential project after 31-03-2019, the developer has to discharge the tax liability under Reverse Charge Mechanism (RCM). After the construction of the property, the applicant transfers the possession of the building to the land owner by signing an allotment letter or entering into a conveyance deed for the land owners share. The residential units sold by the builder to buyers before the issuance of completion certificate or first occupation are considered as a supply of construction service and appropriate GST has to be paid by the developer. If the builder's flats are sold after issuance of Completion certificate by the competent authority, the transaction would fall und....
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....otal amount charged for such supply. Explanation .- For the purposes of paragraph 2, and paragraph 2A below "total amount" means the sum total of, -- (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be including by way of lease or sub-lease. 15. The sale and purchase, combined with the registration of land and building is governed by the Registration Act, 1908 which is a central legislation. On the basis of Real Estate (Regulation and Development) Act, 2016, the government of Tamilnadu formulated The Tamil Nadu Real Estate (Regulation and Development) Act, 2016, also known as TNRERA which aimed at regulating and promoting the real estate sector in Tamilnadu which mandates the registration of real estate projects and ensures fair business practices between promoters and buyers. 16. As per Schedule-III of the CGST/TNGST Act, the sale of land does not attract GST only if the transaction exclusively relates to the transfer of ownership of land, which is an immovable property. However, if it includes other services such as an electricity line, water line, drainage line, land levelling, etc., ....
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....because it is a tax collected explicitly by state governments in property transactions. GST focuses on goods and services, and the nature of stamp duty as a state-imposed property tax which is placed beyond the scope of GST integration. Therefore, no GST on stamp duty and registration can be imposed. Hence, stamp duty and registration charges are kept out of scope of GST. 19.1 Goods and Services tax is a tax levied on the supply of goods and services, which includes the construction of residential properties. For under-construction properties, the builder typically charges GST on the sale value of the flat. 19.2 From the above, it could be inferred that the nature and the meaning of the stamp duty and registration charges have no nexus with the GST and both are mutually exclusive. The concept of composite value registration of both land (UDS) and building (residential units) introduced by the Government of Tamilnadu, in line with the state of Karnataka, is only for the purpose of arriving at the amount of stamp value and the registration charges during the course of purchase of land. This is to ensure that the entire property including both land and the constructed area is regist....
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....t is not tenable. Therefore, the claim of the applicant in the query seeking exclusion under SI. No. 5 of Schedule-III of the Act shall not be acceded to. 23.3 From the above facts and circumstances, the applicant is a builder promoter and their activity falls within the Serial No.3 (ia) of Notification No. 11/2017, Central Tax (Rate), dated 28.06.2017 as amended vide Notification No.3/2019, Central Tax (Rate), dated 29.03.2019, which attracts levy of GST. 23.4 The execution of the sale deed by the land owner for the undivided share of land area is a critical determinant in establishing whether the transfer of land qualifies as an independent transaction. If such execution is completed before or independent of the construction activity undertaken, the exclusion of the land value from GST liability shall be substantiated. For a composite contract where consideration is not bifurcated, GST is liable to be paid on the entire transaction value, subject to one third deduction of land value. After the introduction of new norms read with the circular, if the composite value of the project is considered for registration of residential units as part of single agreement, where land cost an....