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TMI Blog2021 (8) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 7 read with Paragraph 5 (b) of Schedule II of the CGST Act. The completion certificate mentioned therein is the Completion Certificate issued in accordance with the laws, rules and regulations laid down in this regard by the Central Government, State Government or any other authority - The Rules governing the construction or reconstruction or alteration or extension of public and private buildings in the State of Kerala are contained in the Kerala Municipality Building Rules, 1999 issued under G.O.(Ms) No. 188/1999/LSGD dated 01.10.1999 of the Government of Kerala published as S.R.O No. 777/1999 dated 01.10.1999. The Kerala Municipality Building Rules, 1999 was superseded by the Kerala Municipality Building Rules, 2019 issued under G.O. (P) No. 77/2019/LSGD dated 02.11.2019 of the Government of Kerala published as S.R.O. No. 828/2019 dated 02.11.2019. The completion certificate in respect of the construction of a building or civil structure in the State of Kerala is the certificate prescribed in sub-rule (1) of Rule 22 and Rule 20 respectively of the KMBR, 1999 and KMBR, 2019. The completion certificate under any law for the time being in force mentioned in clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as supply attracting GST liability under the CGST Act. 4. Accordingly, the applicant requested advance ruling on the following; 1. Whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated a supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after submission of completion certificate in Form Appendix F issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in Form Appendix H as per Rule 22 of the Kerala Municipality Building Rules, 1999 but before expiry of 15 days from the date of such submission? 2. Whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated a supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after expiry of 15 days from the date of submission of completion certificate in Form Appendix F issued by the Registered Architect / Engineer / Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration; (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1) - (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as- (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. 5.2. As per Section 7(2) of the CGST Act, activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression construction includes additions, alterations, replacements or remodelling of any existing civil structure. 5.5. It may be understood from the explanation to clause (b) of paragraph 5 of Schedule II of the CGST Act that competent authority means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, a certificate from a registered Architect, a Chartered Engineer or a Licensed Surveyor meeting the criteria specified in the said provision. Therefore, it is clear that the competent authority for issue of completion certificate is governed by the laws applicable to the builder. 5.6. The applicant and its members are carrying on construction activity within the State of Kerala and for the period prior to 08.11.2019 were governed by the Kerala Municipality Building Rules, 1999 (hereinafter referred to as KMBR, 1999) and for the period post 08.11.2019 are governed by the Kerala Municipality Building Rules, 2019 (here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the development or redevelopment of land has been effected in conformity with the permit given, issue a development certificate in the form in Appendix G, not later than 15 days from the date of receipt of the completion certificate: .. (3) The Secretary shall, on receipt of the completion certificate and on being satisfied that the construction or reconstruction or addition or alteration has been carried out in conformity with the permit given, issue occupancy certificate in the form in Appendix H not later than fifteen days from the date of receipt of the completion certificate: Provided that if no such occupancy certificate is issued within the said fifteen days, the owner may proceed as if such occupancy certificate has been duly issued to him. 5.11. For the period post 08.11.2019, Rule 20 of the KMBR, 2019 deals with completion certificate, development certificate and occupancy certificate. The relevant portion of Rule 20 of the KMBR, 2019 reads as follows; 20. Completion certificate, development certificate and occupancy certificate- (1) Every owner shall, on completion of development or redevelopment of land or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a certificate issued and signed by the owner and registered institution or Architect or Building Designer or Engineer or Supervisor in the stipulated form in Appendix F of the KMBR, 1999 for the period prior to 08.11.2019 and in form in Appendix E3 of the KMBR, 2019 for the period after 08.11.2019. The format of completion certificate in Appendix F and Appendix E3 is enclosed as Exhibits 5 and 6. 5.13. The said completion certificate is to be submitted by the builder to the Secretary for issuance of occupancy certificate in the form in Appendix H of the KMBR, 1999 for the period prior to 08.11.2019 and in the form in Appendix F2 of the KMBR, 2019 for the period after 08.11.2019. The format of occupancy certificate in Appendix H and F2 is enclosed as Exhibits 7 and 8. 5.14. The proviso to sub-rule (3) of Rule 22 of the KM BR, 1999 and sub-rule (3) of Rule 20 of the KMBR, 2019 further provide that where the Secretary fails to issue the occupancy certificate within 15 days of the receipt of completion certificate, the owner may proceed as if such occupancy certificate has been duly issued to him under the KMBR as may be applicable for the relevant period. 5.15. For further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase may be in form Appendix F to KMBR, 1999 or in form Appendix E3 to the KMBR, 2019 as applicable, the said transaction would not be treated as a supply of service and would therefore, not attract GST liability under the CGST Act. 6. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The jurisdictional officer has not offered any comments and hence it is presumed that the jurisdictional officer has no specific comments to offer. It is also construed that there are no proceedings pending on the issue against the applicant. 7. Personal Hearing: The applicant was granted opportunity for personal hearing on 06.01.2021. Adv. Jose Jacob represented the applicant for personal hearing. He reiterated the contentions made in the application and requested to issue the ruling on the basis of the submissions made in the application. 8. Discussion and Conclusion: 8.1. The matter was examined in detail. The scope and meaning of supply - the taxable event in GST is contained in Section 7 of the CGST Act. As per clause (a) of sub-section (2) of Section 7 the activities or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression construction includes additions, alterations, replacements or remodelling of any existing civil structure. On a plain reading of the above provision, it is evident that the completion certificate mentioned therein is the Completion Certificate issued in accordance with the laws, rules and regulations laid down in this regard by the Central Government, State Government or any other authority. 8.3. The Rules governing the construction or reconstruction or alteration or extension of public and private buildings in the State of Kerala are contained in the Kerala Municipality Building Rules, 1999 issued under G.O.(Ms) No. 188/1999/LSGD dated 01.10.1999 of the Government of Kerala published as S.R.O No. 777/1999 dated 01.10.1999. The Kerala Municipality Building Rules, 1999 was superseded by the Kerala Municipality Building Rules, 2019 issued under G.O. (P) No. 77/2019/LSGD dated 02.11.2019 of the Government of Kerala published as S.R.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate in respect of the completed part. Kerala Municipality Building Rules, 2019: - 20. Completion certificate, development certificate and occupancy certificate. - (1) Every owner shall, on completion of development or redevelopment of land or construction or reconstruction or addition or alteration of building, as per the permit issued to him, submit a completion certificate certified and signed by him to the Secretary in the form in Appendix El together with sufficient copies of plans and drawings of completed building: Provided that in the case of buildings, other than residential buildings up to two floors with total built-up area not exceeding 150 sq. metres, the completion certificate shall be certified and signed by the owner and registered Institution or Architect or Building Designer or Engineer or Supervisor also as in Appendix E3 together with sufficient copies of plans and drawings of completed building. (2) The Secretary shall, on receipt of the completion certificate and on being satisfied that the development or redevelopment of land has been effected in conformity with the permit given, issue a development certificate in the form i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) The owner of a building may, if he intends to occupy the building before its completion, apply to the Secretary for that purpose together with partial completion certificate by the owner and registered Institution / Architect/ Building designer/ Engineer/ Supervisor in Appendix E2 and E4 respectively, and sufficient copies of plans and drawings of partially completed building. (5) Secretary shall ensure the compliance of the provisions of these rules in respect of the partially completed building and on being satisfied that such occupancy will not endanger life, issue occupancy certificate in respect of such partially completed building. 8.5. The format of the completion certificate prescribed in proviso to sub-rule (1) and the format of the occupancy certificate prescribed in sub-rule (3) of Rule 20 of the KMBR, 2019 in Appendix E3 and Appendix F2 respectively is reproduced below; APPENDIX E3 [See rule 20(1) 88(1)] COMPLETION CERTIFICATE BY INSTITUTION, ARCHITECT, ENGINEER, ETC . Certified that the development or redevelopment of land or construction or reconstruction or addition or alteration of building(s)/ erection of telecommunication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the observations stated above, the following rulings are issued; RULING 1. Whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated as supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after submission of completion certificate in Form Appendix F issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in Form Appendix H as per Rule 22 of the Kerala Municipality Building Rules, 1999 but before expiry of 15 days from the date of such submission? If the entire consideration in respect of the transaction is received after submission of the completion certificate in Form Appendix F to the Secretary as per Rule 22 of the Kerala Municipality Building Rules, 1999 the transaction shall not be treated as supply under GST in view of provisions contained in Paragraph 5 of Schedule III of the CGST Act, 2017. 2. Whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated as supply to determine G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent undertaken by the applicant would be treated a supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after expiry of 15 days from the date of submission of completion certificate in Form Appendix E3 issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in the Form Appendix F2 as per Rule 20 of the Kerala Municipality Building Rules, 2019? If the entire consideration in respect of the transaction is received after submission of the completion certificate in Form Appendix E3 to the Secretary as per Rule 20 of the Kerala Municipality Building Rules, 2019 the transaction shall not be treated as supply under GST in view of provisions contained in Paragraph 5 of Schedule III of the CGST Act, 2017. 6. Post 08.11.2019, what would be the date of completion of an apartment constructed within the State of Kerala for the purpose of determining whether the transaction of sale of apartment would be treated as supply attracting GST liability? The date of issue of completion certificate for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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