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2019 (8) TMI 395 - AAR - GST


Issues Involved:
1. GST liability on work executed under Joint Development Agreement (JDA) on landowner's portion where work commenced during pre-GST and continued under GST Law.
2. Valuation for payment of GST.
3. Time of supply for GST applicability.

Detailed Analysis:

1. GST Liability on Work Executed Under JDA:
The primary issue is whether the applicant is liable for GST on the construction service provided to the landowner under a Joint Development Agreement (JDA) where the construction commenced before the GST regime and continued into the GST regime. The applicant argued that the transaction should be considered as barter, which falls under the definition of "Supply" as per Section 7 of the CGST Act 2017. The consideration received by the applicant is in the form of development rights, which qualifies as "consideration" under Section 2(31) of the CGST Act 2017. Therefore, the activity is considered a "Supply" and is liable for GST under Section 9 of the CGST Act 2017.

2. Valuation for Payment of GST:
The value of the supply is to be determined as per Notification No.11/2017-Central Tax (Rate) dated 28.06.2017. The value of the service involving the transfer of property in land or undivided share of land shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, deemed to be one-third of the total amount charged for such supply.

3. Time of Supply for GST Applicability:
The applicant contended that tax should be levied under the earlier law for the work executed before the GST regime and under the GST law for the work executed after the GST regime. However, as per Notification No.4/2018-Central Tax (Rate) dated 25.01.2018, the liability to pay GST arises at the time when the developer transfers possession or the right in the constructed complex to the landowner. Since the possession of the landowner's share of flats has not been transferred yet, the entire tax liability falls under the GST law.

Conclusion:
The ruling concluded that the applicant is liable to pay GST for the work executed under the JDA on the landowner's portion. The value for GST payment should be determined as per para 2 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017. The time of supply falls under the GST regime, making the entire tax liability applicable under GST law.

 

 

 

 

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