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TMI Blog2023 (5) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively). The applicant is engaged in the development of plots. 3. The applicant has sought advance ruling in respect of the following questions: i. Whether the applicant is liable to charge GST, if the booking of plot, receipt of consideration and agreement for sale is entered as well as sale deed is executed after the release certificate, on the following components (Under Section 97(2)(e) of CGST / KGST Act): a. Sale of Plot; b. Basic Infrastructure Development charges; and c. Other common amenities and facilities charges. ii. Whether the applicant is liable to charge GST, if the booking of plot and / or receipt of consideration and/or agreement for sale is entered prior to the release certificate and sale deed is executed after receipt of release certificate, on the following components (Under Section 97(2)(e) of CGST/ KGST Act): a. Sale of Plot; b. Basic Infrastructure Development charges; and c. Other common amenities and facilities charges. iii. What is the applicability of GST if the sale price is a consolidated price in the agreement for sale towards land cost, basic infrastructure development charges and other common amenities and facilities charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation by authorities and registration of plots and collecting balance money. * Completion of pending other common amenities and facilities and handing over the same to common association / apex body, as the case may be. 5.6 The applicant states that the sale consideration of the plots includes consideration towards plot of land, development of basic infrastructure prescribed by authorities in the approved plan as well as cost for providing all other common facilities, amenities and specifications to be provided within the project. 5.7 The applicant states that the cost of electrical connectivity to the common amenities, water line and plumbing till the plot, etc is included in the sale consideration. The applicant upon obtaining the Release Certificate from the competent authority shall offer in writing the possession of the plot, to the purchaser/s in terms of the draft agreement for sale, to be taken within two months from the date of issue of release certificate as per RERA Act. 6. Applicant's Interpretation of Law: 6.1 The applicant is of the understanding that sale of land is neither a supply of goods nor a supply of service as per Entry No.5 of III Schedule to CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for GST considering the decision of authority for advance ruling in No. KAR ADRG 31/2022 dated 08-09-2022 and based on Circular No. 177/09/2022 TRU dated: 03-08-2022. PERSONAL HEARING / PROCEEDINGS HELD ON 12.12.2022 7. Smt Annapurna Kabra, Chartered Accountant and Duly Authorised Representative appeared for personal hearing proceedings held on 12.12.2022 and reiterated the facts narrated in their application. FINDINGS & DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We have also considered the issues involved on which advance ruling is sought by the applicant and the relevant facts along with the arguments made by their authorized representative and also their submissions made during the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty to form a single integrated plotted development residential project to be developed in phase-wise manner and such phase-wise development shall be considered as future phases of Godrej Woodland residential layout upon completion and become part and parcel of Godrej Woodland, hereinafter referred to as "Future Development". The Promoter is entitled to develop the said Additional Lands earmarked for future development by modifying the existing Layout Plan sanction and RERA approval for Godrej Woodland, Godrej Woodland Phase-II, Godrej Woodland Phase-Ill and the Purchaser/s confirm that he/she/they is/are aware of the same and hereby give his/her/their consent for such future development of Godrej Woodland by modification of existing Plan. Purchaser/s is/are aware that the Purchaser/s and occupiers of the said future development in Additional Land earmarked for future development, shall use the entrance, approach road, pathway, infrastructure, other facilities and amenities of "Godrej Woodland", "Godrej Woodland Phase-II" and "Godrej Woodland Phase-III" in common with the Purchaser/s of such Future Development. The Purchaser/s confirms that he/she/they do not have any objection f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;B') annexed hereto, as demanded by the Promoter within the time and in the manner specified therein. h. Para 1.6 states as under: "The Sale Consideration of the said Plot includes recovery of price of land, development of the Basic Infrastructure and Other common amenities and facilities and cost for providing all other facilities, amenities and specifications to be provided within the Plot and the Project. The Promoter shall provide the electric wiring till the Plot, electrical connectivity to the common amenities, water line and plumbing till the Plot, etc., the cost of which is included in the Sale consideration. i. Para 2 Variation states as under: "The Promoter shall confirm the final Plot Area that has been allotted to the Purchaser/s after the development of the Project is complete and the Plot Release Certificate is granted by the competent authority, by furnishing details of the changes, if any, in the Plot Area. In the event of any variation in the Plot Area, total consideration payable for the plot area shall be recalculated upon confirmation by the Promoter and in such event only recourse shall be a pro-rata adjustment in the last instalment payable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser/s are specifically made aware of this fact before the execution of this Agreement. The Promoter, at its own discretion, may also hand over the Club House to the Association of Owners/ Apex Body for maintenance and management of the Club House. n. The Annexure B which is part of the above agreement and related to the Sale Consideration and Payment Plan, shows as under "ANNEXURE B SALE CONSIDERATION AND PAYMENT PLAN The Sale consideration shall be Rs./- ............. (Rupees ............. only) excluding taxes. Sl.No. Particulars of Sale Consideration Rupees (i) Towards Plot Area (ii) Towards Basic Infrastructure Development Charges (iii) Towards Other Common Amenities and Facilities Charges Total Rs. Sl.No. Particulars of Estimated Other Charges Rupees (i) Estimate amounts for deposit towards provisional monthly contribution towards outgoings of Society or Limited Company/ Federation/ Apex body for 36 months (ii) Estimate amounts towards ad-hoc corpus fund to be deposited with Promoter/ Service Provider, as may be directed by the Promoter Total Rs. From the above, it is seen that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities or on one of the plots in Additional Land. (b) The Purchasers are entitled to use the facilities and services of the Club House upon payment of subscription fees as prescribed by the Promoter or its nominees (c) The Club House shall be in complete control of the Promoter/ remain in exclusive ownership of the Promoter and the Promoter has the sole right and discretion to sell, lease, mortgage, encumber, construct buildings, complexes, etc. (d) The Promoter, at its own discretion, may also hand over the Club House to the Association of Owners/ Apex Body for maintenance and management of the Club House. 16. From the above, it can be seen that the Club House and other common amenities are provided as a service with no transfer of title to land or buildings and hence would not be covered under entry 5 of Schedule III of the CGST Act. What is provided is only a service of access to the service facilities and hence is liable to tax and does not form part of the consideration for the land or building. These are also not mandatory facilities to be provided as per any law. The ownership rights on the above facilities are found to be still remaining with the Promoter and the Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration for the said supply;" 19. The Applicant wants to know the applicability of GST if the sale price is a consolidated price which includes land cost, basic infrastructure development charges and other common amenities and facilities charges. There is only service of access to club house and common amenities and the same is considered as a supply as explained in para 14 supra and hence the value proportionate to club house and common amenities are applicable to GST. 20. In view of the foregoing, we pass the following RULING i. a) The applicant is not liable to charge GST on sale of plot, if the booking of plot, receipt of consideration and agreement for sale is entered as well as sale deed is executed after the release certificate. b) The applicant is not liable to charge GST on Basic Infrastructure Development charges if the booking of plot, receipt of consideration and agreement for sale is entered as well as sale deed is executed after the release certificate. c) The applicant is liable to charge GST on Other common amenities and facilities charges if the booking of plot, receipt of consideration and agreement for sale is entered as well as sale deed is exec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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