TaxTMI 
TaxTMI 
2026 (2) TMI 646
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....d by the applicant by fraud or suppression of material facts or misrepresentation 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 (herein 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. M/s JAY PEE ENTERPRISES, a sole proprietorship concern having its office at Plot No. 09A, Jubilee Homes, Road No.- 7, HCF Mathigiri Hosur, Krishnagiri, Tamilnadu - 635110 (hereinafter called as the "Applicant") is registered with GST in the State of Tamilnadu vide registration No. 33AFZPJ5868F1ZU. The applicant has sought advance ruling on the following question: 1. Whether the actual value charged for 'transfer of land' is available as per sale deed and the actual value for construction of residential houses is available as per construction agreement, can GST be charged @ 18%....
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....OU charges single amount which includes considerations attributable towards both sale of land and construction of residential house. The applicant starts the construction as soon as getting approval from the concerned authorities for residential house. Stage-wise payments are received from the buyer as per the agreed terms mentioned in the payment schedule and conditions in the construction agreement. • As per the industry practice, two methods exist in which the title of the property can be transferred. (a) First method is to execute agreement for sale of residential house and receive consideration towards residential house including value of underlying land. Once consideration is received, a sale deed is executed for entire amount containing both the land value and building value. This method requires payment of higher stamp duty since it is paid on both the value of land and building. (b) In the second method, two separate documents are executed, one a sale deed for sale of land and the other for construction of residential house. • The applicant is following the second method since it entails payment of stamp duty only on the value of....
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....RA. • The applicant submits that they are constructing residential apartments as per para 4(xxix) of Notification No. 11/2017-CT (Rate) as it is intended for residential use as declared to competent authority. Competent authority is being defined in para 4(xxv) of the notification. Permission for construction of apartments is taken from Onnalwadi Panchayat. • The applicant submits that theirs is a real estate project as per para 4(xviii) of the notification read with Section 2E of RERA. • Within the meaning of real estate project, the applicant submits that their activity is classifiable as Residential Real Estate Project (RREP) as per par 4(xix) since the carpet area is not more than 15% of the total carpet area of all the apartments in the Real Estate Project. • The applicant submits that they are promotors as per Para 4(xvii) of the Notification since they construct building apartments for the purpose of selling it other persons. • The applicant submits that residential houses are constructed as per plan for each plot and according to the requirements of the purchaser and hence the 'competent authority' to issue 'c....
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.... No. 11/2017-CT (Rate) dated 28-06-2017, GST is chargeable on 'total amount charged for such supply'. Para 2 further specifically provides for deduction towards 'value of such transfer of land' from total amount charged. Since actual value for transfer of land is available as per Sale Deed, the said valuc should be reduced from the total amount (available in MOU) to ascertain taxable value instead of 1/3rd value as per Munjaal Manishbhai Chatt Cs. UOI, 2022 (62) GSTL 262 (Gujarat). 6. PERSONAL HEARING The applicant was given an opportunity to be heard in person on 23.09.2025. Smt. Annapurna Kabra and Shri. Manjunath, S, Chartered Accountants (CAs) of M/s. Annapurna & Associates and Authorised Representatives (ARs) of the applicant appeared for the personal hearing. AR stated that they have satisfied all the conditions of Notification No. 11/2017-CT (Rate) amended vide Notification No. 03/2019-CT (Rate) dated 28-03- 2019and hence are liable to charge GST at the rate of 0.75%/3.75% depending on the type of project. AR further stated that the applicant is eligible to exclude the actual value of land instead of 1/3rd of the total value prescribed in para 2 of the Notification. Th....
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.... or development or planning authority; (2) the expression "construction" includes additions, alterations, replacements or re-modelling of any existing civil structure; (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (d) development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software; (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and (f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. 9. As pr the facts presented by the applicant, the applicant is a 'promotor' as defined in clause (xvii) of the notification meaning, (xvii) the term "promotor" shall have the meaning as assigned to it in clause (zk) of section 2 of Real Estate (regulation and Development) Act, 2016 (16 of 2016). 10. As per clause (zk) of Section 2 of Real Estate (regulation and Development) Act, 2016 (16 of 2016), promotor is defined to mean, (zk) "promoter" means, ....
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....on, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise; 12. The activity rendered by the applicant is in the nature of 'original works since the applicant is constructing a new building. The applicant enters into a Memorandum of Understanding (MOU) with the prospective buyers for sale of land and construction of residential house. Therefore, it fits into the definition of 'single residential unit' as defined under para 2(zze) which states that (zze) "single residential unit" means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family; 13. 'Real Estate Project (REP)' and 'Residential Real Estate Project (RREP)' are defined in Notification No. 03/2019-CT (Rate) dated 29-03-2019 and Notification No. 04/2019-CT(Rate) dated 29-03-2019 to mean, (ix) the term "Real Estate Project (REP)" shall have the same meaning as assigned to it in clause (zn) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017). 14. As per clause (zn) of Section 2 of Real Estate (regulation and Development) Act, 2016 (16 of 201....
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....) (2) (3) (4) (5) 3 Heading 9954 (Construction services) "(i) Construction of affordable residential apartments by a promoter in a Residential Real Estate Project (herein after referred to as RREP) which commences on or after 1^st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein, 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. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) 0.75 Provided that the central tax at the rate specified in column (4) shall be paid in cash, that is, by debiting the electronic cash ledger only; Provided also that credit of input tax charged on goods and services used in supplying the service has not been taken except to the extent as prescribed in Annexure I in the case of REP oth....
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....f input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of completion certificate or first occupation of the project, whichever is earlier) falls short of the said threshold of 80 per cent., central tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of nine percent on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017) shall apply to him as if he is the person liable for paying the tax in relation to the supply of such goods or services or both; Provided also that notwithstanding anything contained herein above, where cement is received from an unregistered person, the promoter shall pay tax on supply of such cement at the applicable rates on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017), shall apply to him as if he is the person liable for paying the tax in relation to such supply of cement; (Please refer to the illustrations in annexure III) Explanation.- 1. The promoter shall maintain pr....
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....rangement of signing MOU is being executed by the applicant with the buyers and the payment schedule of the total cost of land and construction of building is also tabulated in the MOU. After signing the MOU, the applicant enters into two agreements with the buyers for sale of land and construction of residential house on the same day. Signing of MOU and the execution of two agreements on the same day implies that the construction service provided by the applicant to the buyers is a single contract for sale of land and construction of building. 18. Schedule-III of the Act prescribes those "activities or transactions which shall be treated neither as a supply of goods nor as a supply of services". As per para 5 of the list, "5. Sale of land and, subject to clause (b) of paragraph (5) of Schedule-II, sale of building" 19. From the above, the sale of land is out of the purview of supply of goods/services. However, in cases of supply of services specified in column (3), in item (i), (ia), (ib), (ic), (id), (ie) and (if) involving transfer of land/undivided share of land, para 2 of Notification No. 11/2017-CT (Rate) dated 28-06-2017 prescribes the method to adopt for arri....
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....efore, the deduction of the actual land value shall not be claimed by the applicant as clarified by the CBIC on the FAQs on Real Estate vide TRU's letter F. No. 354/32/2019-TRU dated 7th May, 2019 which is reproduced below. Sl.No. Question Answer 36 Can a developer take deduction of actual value of land involved in sale of unit instead of taking deduction of deemed value of Land as per paragraph 2 to Notification No. 11/2017-CT (Rate)? No, Valuation mechanism prescribed in paragraph 2 of the notification No. 11/2017-CT (rate) dated 28-06-2017 clearly prescribes one-third abatement towards value of land. 23. In view of the above, we pass the ruling, RULING 1. Whether the actual value charged for "transfer of land' is available as per sale deed and the actual value for construction of residential houses is available as per construction agreement, can GST be charged @ 18% as per Entry No. 3(xii) of Notification No. 11/2017-CT (Rate) r/w Notification No. 11/2017-ST(Rate) only on the amount charged in construction agreement(with corresponding benefit of input tax credit) instead of charging GST @ 1.5%/ 7.5% as per Entry No. 3(i) and 3(ia) on 'total amount char....