2020 (5) TMI 215 - AAR - GST

Permission for withdrawal of application - classification of services - composite supply of Works Contract - activities of construction carried out by the Applicant for its customer under the Construction Agreement - classifiable under Heading 9997, and chargeable to CGST @ 9% under S.No. 35 of Notification No. 11/2017-CT(Rate), dated 28.06.2017 or not? HELD THAT - The applicant has taken a commercial call to not pursue the proposed business project in TamilNadu, Therefore, they prayed that the Hon ble Authority permit the applicant to withdraw the subject application filed in this matter. The application filed by the Applicant seeking Advance Ruling is disposed as withdrawn.

Summary

Issues:
Classification of construction activities under works contract for GST applicability.

Analysis:
The case involved an application for Advance Ruling by a real estate developer regarding the classification of construction activities under a composite supply of works contract for GST applicability. The applicant proposed an arrangement where they would enter into agreements with customers for the sale of undivided share in land (UDS) and construction of units on the UDS. The applicant argued that the construction activities under the Construction Agreement should be classified as works contract service under Heading 9997 and chargeable to CGST at 9%. They supported their contention by referencing various case laws. The applicant was given an opportunity for a personal hearing but later requested to withdraw the application due to unfavorable market conditions and commercial factors, which was granted by the Authority.

The State tax officer provided comments indicating that the proposed place of business of the applicant was already occupied by another entity. The central tax officers did not furnish any comments on the issue raised by the applicant. The authorized representative of the applicant later submitted a letter stating that due to unfavorable market conditions, the applicant decided not to pursue the proposed business project in Tamil Nadu and requested to withdraw the application. Consequently, the Authority ruled to dispose of the application as withdrawn.

In conclusion, the Authority for Advance Ruling, Tamil Nadu, disposed of the application filed by the Applicant seeking Advance Ruling as withdrawn due to the applicant's decision not to proceed with the proposed business project in Tamil Nadu.