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2025 (3) TMI 1329 - AAAR - GSTLevy of GST - sale of developed plots by applicant to various customers after development - development of plots service provided to the land owners - transfer of development rights by the land owner in consideration of land development services received - determination of value of supply of such services for payment of GST - GST on Transfer of development rights - If tax is payable on TDRs on RCM basis and on development service what is the time of payment and what is the applicable Notification. HELD THAT - In the instant case no ruling has been passed by the AAR in respect of three questions. As such advance ruling against which the appeal is filed is incomplete. Further the questions raised for advance ruling are interlinked. Therefore appeal in respect of rulings on answered questions cannot also be effectively decided unless the rulings in respect of remaining questions are available. In view of this this appeal is not maintainable. Though Section 101 of CGST Act 2017 does not contain any provision to remand the matter considering the fact that the lower authority has not passed a ruling on some of the questions raised by the appellant it is constrained to remand the matter back to the lower authority to pronounce a ruling to meet the ends of the justice. The order of the lower authority is set aside and the matter is remanded to the Advance Ruling Authority for consideration afresh.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment were: 1. Whether the sale of developed plots by the appellant to various customers after development is taxable under the GST Acts. 2. Whether the development of plots' service provided to the landowners is taxable under GST, and if so, under which Notification and entry. 3. Whether the transfer of development rights by the landowner in consideration of land development services received is taxable under the provisions of the GST Acts, and if so, who is liable to pay GST under the Reverse Charge Mechanism (RCM) and the applicable rate. 4. How to determine the value of supply for GST payment if transfer of development rights and development of plot services are liable for GST. 5. Whether the developer can claim Input Tax Credit (ITC) on transfer of development rights received from registered landowners while discharging the liability to pay tax on development services provided. 6. The time of payment and applicable Notification for tax payable on Transfer of Development Rights (TDRs) on RCM basis and on development service. ISSUE-WISE DETAILED ANALYSIS 1. Taxability of Sale of Developed Plots The Advance Ruling Authority (AAR) determined that the sale of developed plots is not taxable under the GST Acts. The Court found that the transaction of selling developed plots does not constitute a supply of goods or services under GST, as discussed in Para 7(a) of the original ruling. 2. Taxability of Development of Plots' Service The AAR ruled that the service of developing plots provided to landowners is taxable under GST. The relevant entry is sub-entry xii of entry at serial no.3 with SAC 9954 of Notification 11/2017. The Court agreed with this interpretation, noting that the development service involves a supply of service under GST laws. 3. Taxability of Transfer of Development Rights (TDR) The AAR concluded that the transfer of development rights by the landowner is taxable, with the promoter liable to pay CGST and SGST at the rate of 9% each on a reverse charge basis. This is under entry 5B of Notification 13/2017, as amended by Notification 5/2019. The Court upheld this ruling, emphasizing the applicability of reverse charge mechanism in this context. 4. Determination of Value of Supply The AAR did not provide a ruling on how to determine the value of supply for GST payment, which includes the deduction of land value. The Court noted that this question remained unanswered and is interlinked with other issues, necessitating a comprehensive ruling from the AAR. 5. Input Tax Credit on TDR The AAR did not address whether the developer can claim ITC on TDRs received from registered landowners. The Court observed that this issue is also interlinked with other unanswered questions, requiring further consideration by the AAR. 6. Time of Payment and Applicable Notification The appellant argued that the AAR did not consider Notification No: 6/2019-CT(Rate) dated 29.03.2019, which specifies the time of supply. The Court found that this aspect was not addressed by the AAR and is crucial for determining the tax liability, warranting further examination. SIGNIFICANT HOLDINGS The Court held that the appeal is not maintainable due to the incomplete ruling by the AAR, as several interlinked questions remained unanswered. The Court emphasized the necessity for a comprehensive ruling to effectively address the issues presented. Core Principles Established The Court underscored the importance of addressing all interlinked questions in advance rulings to ensure a complete and effective resolution of the issues presented. It highlighted the need for the AAR to provide a ruling on all questions raised to meet the ends of justice. Final Determinations The Court set aside the order of the lower authority and remanded the matter back to the Advance Ruling Authority for fresh consideration. This decision was made to ensure that all questions are comprehensively addressed and to provide clarity on the issues raised by the appellant.
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