2022 (9) TMI 780 - AAR - GST

Parties to Advance Ruling application - Liability of GST - tax to be paid by the developer with respect to the share of flats given to applicant in pursuance of development agreement? - time of payment of GST - rate of GST - taxable value to be taken for arriving the GST liability - HELD THAT - The developer who is not represented before this authority. A ruling cannot be given on the back of an effected party to determine his liability to pay tax. Hence the application is rejected.

Summary

Issues: Application for Advance Ruling under Section 97(1) of TGST Act, 2017 - Liability of developer for GST on share of flats in development agreement.

Analysis:
1. Application and Admissibility: The applicant, an unregistered individual, filed an application under Section 97(1) of the TGST Act, 2017, seeking an advance ruling on the GST liability of a developer in a development agreement. The applicant paid the requisite fee and declared that the questions raised were not decided by any authority under the GST Act, making the application admissible.

2. Facts of the Case: The applicant, owning land, entered into a development agreement with a developer for constructing residential units to be shared equally. The applicant sought clarity on the developer's liability concerning the share of flats allotted to them, leading to the application for an advance ruling.

3. Questions Raised: The applicant posed queries regarding the GST liability of the developer for the flats allocated under the development agreement, including the timing of payment, applicable GST rate, and taxable value for determining the liability.

4. Personal Hearing: During the personal hearing, the authorized representatives of the applicant reiterated the details of the case, emphasizing the applicant's role as the landowner and their interest in determining the developer's GST liability at the time of transferring the built-up area.

5. Discussion & Findings: The Authority noted that the applicant sought a ruling on the developer's liability without the developer's representation. It was observed that determining a third party's tax liability in their absence was not feasible. Consequently, the application was rejected on this basis.

In conclusion, the judgment by the Authority for Advance Ruling, Telangana, declined to provide an advance ruling on the GST liability of the developer in the development agreement due to the absence of the developer's representation. The decision highlighted the necessity for all concerned parties to be present for a comprehensive ruling on tax liabilities, emphasizing the procedural requirements for seeking advance rulings under the GST Act.