9911796707
TMI Blog2020 (9) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that they are engaged in the business of construction. For the purpose of the business they buy land and develop residential/ commercial property on that land. For the purpose they engaged Architects, consultants, structural engineers to prepare plan for the development of residential/commercial property. Further submitted that prescribed approval from various authorities are procured to develop residential/commercial property on such land. 3. The applicant further submitted that on the basis of such plan and approvals they enter into the agreement with prospective buyers for such residential /commercial property. The agreements entered into are for inclusive of land or undivided share of land basis. The applicant constructs such reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase a prescribed ratio/percentage is applied to determine the amount to be deducted. For example under the erstwhile Value Added Tax regime when amount of labour is not ascertainable for works contract transaction for deduction as per Rule 18(A)(A) of the Gujarat Value Added Tax Rules, 2006 below mentioned provision was made : "Deduction of Charges towards labour, service etc.: (1) The value of the goods at the time of the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract shall be determined by deducting the amounts paid by way of price for sub-contract made with a registered dealer, if any , pertaining to the said work contract. (2) A registered dealer who claims a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place and even at different location in same city/town. In view of that, a uniform deduction for land @33% as prescribed by the notification is contrary to the ground realities. More so, when in applicant's case cost of land is distinctly ascertainable and much more than 33% of the total value to be realized of the constructed residential/commercial property, actual amount of land need to be allowed to be deducted. 6.4 The applicant further submitted that even otherwise, if actual cost of land is allowed to be deducted, assessee shall get encouragement to disclose actual cost of land, that will eventually led towards white economy that is more transparent and compliant of law. Personal Hearing 7. Personal hearing in the matter was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being transferred to the buyers on inclusive of land or undivided share of land basis need to be allowed to be deducted as a whole and not as provided in Not No. 11/2017-CT (Rate) and 08/2017-I.T (Rate) both dated 28.06.2017as one third (33.33%) of the value, because in applicant's case the cost of Land is distinctly determinable and is more than one third (33.33%) of the consideration value of sale of property. The applicant in their support has referred Rule 18(A)(A) of the erstwhile Gujarat Value Added Tax Rules, 2006, wherein it is provided that if at the time of the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract shall be determined by deducting the amounts pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply. Explanation. - For the purposes of paragraph 2, "total amount" means the sum total of, - (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be. 13. The said Paragraph 2 of Notification No. 11/2017-CT (Rate) was amended vide Not. No.1/2018-C.T. (Rate), dated 25-1-2018. The amende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird of the total amount charged for such supply. Accordingly, the applicant contention to allow the deduction of actual value of land from the sale value on the grounds that their land value is ascertainable and other grounds is not legal in terms of para 2 of Not. No. 11/2017-CT (Rate) dated 28.06.2017 as amended vide Notification No. 1/2018-C.T. (Rate), dated 25-1-2018. Further, the reliance of Rule 18(A) (A) of the erstwhile Gujarat Value Added Tax Rules, 2006 is not warranted in the instant case since the Value Added Tax Act is no more in existence. The Value Added Tax Act does not have any legal value in determination of GST liability since the value of supply is to be arrived in terms of the provisions of the GST Act. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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