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TMI Blog2022 (10) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... re under to a third person other than the applicant. Admittedly, the applicant has preferred this application on behalf of the members of the applicant and hence the application is not in respect of any matter specified in Section 97 (2) of the CGST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence this authority has no jurisdiction to issue ruling on the above question. - KER/136/2021 - - - Dated:- 1-6-2022 - DR. S.L. SREEPARVATHY, IRS AND SHRI ABRAHAM RENN S. I.R.S MEMBER Authorized Representative : Adv. Jose Jacob 1. The Confederation of Real Estate Developers Association India ( herein after referred to as the applicant ) is the apex body of private real estate developers representing 20000 members spread across 21 State level chapters and 220 city level chapters in India. 2. At the outset it is clarified that the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act) and the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as KSGST Act) are same except for certain provisions. Accordingly, a reference hereinafter to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of apartments in the project. In the light of the evolving provisions of GST, the developer members of the applicant entering into joint development arrangements with land owners have queries regarding the implication of GST under the CGST Act, 2017 and KSGST Act, 2017 on the land owner's entitlement to a portion of the constructed apartment. 4.2. The developers are constructing apartments on the property owned by the land owners, which would be sold by the developers to the end customers along with proportionate undivided share in the property wherein the property is registered in favour of the end customers by the land owners. As regards the developer, the entire income from sale of apartments is received from the end customer and subjected to GST if sold prior to completion. As regards the portion of the built-up area the land owners are entitled to, while the developers incur construction expenses towards construction of the same, there is no flow of income from the land owners to the developer on account of such entitlement. The land owners and the developer being unrelated parties, the land owner's entitlement to a portion of the apartment constructed by the develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers is for several apartments. The transactions being entirely different both in terms of the nature of the transaction as well as the quantum of the transaction, it would be incorrect to adopt the market value of the apartments allotted or sold to independent buyers and it has to be concluded that neither open market value nor value of supply of services or both of like kind and quality is not available in the present case. Consequently, sub rule (a) (c) of Rule 27 of the COST / SGST Rules fail. 4.5. Since open market value is not available, sub-rule (b) of Rule 27 of the CGST /SGST Rules may be examined. According to the said sub-rule (b) of Rule 27 of the CGST / SGST Rules, the value of supply in the absence of market value shall be the total of consideration in money and any such further amount in money as is equivalent to the consideration not in money. However, in the instant case since no consideration is flowing from the land owners to the developers and if the undivided share of land transferred to the end customers is treated as the consideration, for which the money equivalent is not ascertainable and extremely subjective, this sub rule also fails. 4.6. In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understanding that where construction is of affordable residential apartments, the effective rate of GST would be 1.5% and where Construction is of residential apartments other than affordable residential apartments the effective rate of GST would be 7.5%, subject to satisfaction of conditions mentioned in Column 5 of the table mentioned against the relevant entry. 5. 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 submitted remarks on the merits of the questions raised in the application. 6. Personal Hearing: The applicant was afforded opportunity of personal hearing on 03/11/2021. Adv. Jose Jacob represented the applicant and presented in detail the contentions made in the application and requested to issue ruling on the basis of the submissions made in the application and at the time of personal hearing. 7. Discussion and Finding: 7.1. The issue was examined. The questions raised by the applicant before the authority is on the following issues; 1. Whether the portion of apartments constructed by Developers and allotted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing is sought under this Act, shall be in respect of- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 7.5. Section 103 of the CGST Act that pertains to the applicability of advance ruling reads as follows; 103. Applicability of advance ruling- (1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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