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TMI Blog2024 (6) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate. The said project was divided in 4 phases. The first three phases have already been completed and delivered to the customers. The 4th phase was completed in two parts-169 units in one part and 113 units in second part. Any occupancy in the Phase IV the project without Completion Certificate/Occupancy Certificate is in contravention of Bye-laws of Ghaziabad Development Authority. The letter of possessions cannot be substitute the occupation certificate. Thus, having letter of possessions or sale deed does not necessarily imply that first occupation has taken place. If answer to the above is affirmative, unit sold after which date shall be treated as exempt from GST - HELD THAT:- The Completion Certificate was denied to the applicant by GDA. Once, GDA denied Completion Certificate to the applicant. Hence, Completion Certificate cannot be said to be deemed approved. The first occupation cannot be said to be taken either. Thus, the sale of residential units in Phase IV of the project by the applicant is not sale of immovable property but sale of services and thus GST is leviable. - SHRI AMIT KUMAR AND SHRI HARILAL PRAJAPATI, MEMBER Represented by : CA Anuj Garg ORDER UNDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.04.2019 the applicant opt for new regime and start charging GST @ the rate of 5% i.e. 2.5% CGST and 2.5% SGST (After abatement of 1/3 part on account of land value). (e) That the Applicant is engaged in developing the project Saviour Park having 1150 Units in aggregate. The said project has been divided into 4 phases. First Three Phases has already been completed and delivered to customers. Phase IV is having total 282 units and registered under RERA vide registration number UPRERAPRJ7191. The said phase was constructed and completed in two parts. Part I of Phase IV having 169 units was already completed and delivered. Part II of Phase IV having 113was under construction and has been completed in April 2023. (f) That the construction of the 113 units in Phase IV was completed by the applicant in April 2023 and the applicant has also obtained certificates / NOC from various authority required for completion of building structure. NOCs required for completion of building are Fire Safety NOC, Structure stability certificate, lift NOC, Electrical NOC. (g) That after completion of construction and obtaining necessary NOCs, applicant vide letter dated 11.04.2023 has applied to Ghaziaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and possession to all those customers has also been given. Those customers have also occupied the units. (o) That GST on all the units sold before the date of deemed completion has been duly charged and paid to the government. The same has been duly disclosed in GSTR-1 and GSTR-3B of respective period. 4. The applicant has submitted their interpretation of law as under- The Applicant most respectfully begs to submit the interpretation of law as per the Applicant in relation to the taxability of units sold in the project Saviour Park sold after deemed completion or first occupation. 5.1 Legal Provisions of the GST Law: Section 2 (52) of Central Goods And Services Tax Act, 2017 goods means every kind of movable properly other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; Section 2 (102) of Central Goods And Services Tax Act, 2017 services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 remodeling of any existing civil structure; Para 5 of Schedule III of Central Goods And Services Tax Act, 2017 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 5.2 The units sold in the project Saviour Park* after deemed completion or after first occupation is exempt from GST A. No GST is leviable on sale of Immovable property B. Phase IV in the project is separately registered under RERA and a distinct project C. Completion certificate has been deemed approved D. First Occupation has been given in the building E. Sale deed has been executed and registered with the registrar F. Completion Certificate of Architect and Chartered Engineer has been obtained. A. No GST is leviable on sale of Immovable property As per Section 9 of CGST Act, 2017, tax is levied on supply of goods or services or both except on the supply of alcoholic liquor for human consumption. Section 2 (52) defines the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered as 2 (two) separate projects under the provisions of RERA viz. 1st to 10th floor as one Project and 11th to 20th floor as another project, whether the Developer can consider the entire building as single ongoing project, since all the three conditions to be complied with for classifying a project as an ongoing project can be satisfied only if the entire building is considered as a single project? (a) Both the projects registered as separate projects under RERA, 2016 shall be treated as distinct projects for the purpose of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017 as amended by Notification No. 3/2019-Central Tax (Rate) dated 29-03-2019. Both the projects will have to independently satisfy the requirements of the definition of ongoing projects. (b) Furthermore, if different towers in a single layout are registered as separate projects under the provisions of RERA but where the approvals are common for all the towers, whether the Developer can consider entire layout as a single Ongoing project ? (b) No. All the towers registered as different projects under RERA shall be treated as distinct projects. Only such towers registered as distinct projects for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of para 5 of Annexure 2 of building bye laws of GDA is reproduced below: The above amendment was made in the Byelaws of GDA vide Government order No.: 1241/8-3-17-34Misc./2008 dated 31.10.2017. the said amendment was made in byelaws for implementation of Business Reform Action Plan 2017 under AMRUT Scheme and Ease of Doing Business. Copy of Government order is enclosed. Delving further, it is submitted that UP RERA, which is a state regulatory authority of Real estate, vide order no. 8208/UPRERA/20 th Meeting/office order/2019-20 dated 16.09.2019 also clearly states that if promoter (applicant in the present case) has applied for completion certificate before competent authority, along with electrical safety certificate, fire safety certificate, structural engineer certificate, and lift safety certificate, and competent authority has not intimated the rejection of application within 8 days along with required modifications, it shall be deemed approved by competent authority. Copy of RERA order is enclosed. Relevant portion of said order is reproduced herewith for ready reference: Thus as per the building bylaws of GDA, Government order dated 31.10.2017 and order of UPRERA 16.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys and even the letter issued after the prescribed period is not in accordance with the byelaws, the project shall be considered as deemed completed w.e.f. 21.04.2023. D. First Occupation has been given in the building Without prejudice to above, it is further submitted that first occupation in the Part II of Phase IV has already been given on 25.04.2023 and therefore the condition as prescribed in para 5 (b) of Schedule III is satisfied and hence GST is not leviable on unit sold after first occupation even if completion certificate or occupancy certificate is not granted. The fact that first occupation has been taken in the building is clearly evident possession letter duly acknowledge by the customers. Also the sale deed of the units in Part II of Phase IV which is also confirmative evidence that possession has been given. Copy of possession letter and sale deed of few units are enclosed. As per FAQ (Part I) Q No. 29 issued by CBI C vide circular F No. 354/32/2019-TRU dated 7-5-2019, first occupation means first occupation of the project in accordance with laws, rules and regulations of State/Central Government or any other authority. If literal meaning of the circular is compreh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered with the sub-registrar as immovable property. F Completion Certificate of Architect and Chartered Engineer has been obtained. Based on the above submissions it is clearly established that construction of building has been completed, Completion certificate has been deemed approved and first occupation has already been given. Further, the applicant has also obtained the completion certificate of building from Architect and Chartered Engineer. As per Para 5 (b) of Schedule II of CGST act, in case of no-requirement of completion certificate from any authority, certificate from Architect, Chartered Engineer or licenced surveyor can be obtained. In the present case, although there is requirement to get the completion certificate from GDA. However, as additional evidence of completion of units, certificate from Architect and chartered engineer has also been obtained by the applicant. That certificate issued by architect or chartered engineer clearly states that building has been 100% constructed and completed. Copy of certificate of Architect and Chartered Engineer is enclosed. 6. The application for advance ailing was forwarded to the Central Jurisdictional GST Officer vide lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance ruling on following question/clarification- 1. Whether selling of residential units in the project Saviour Park after deemed completion or first occupation in that phase (Phase IV) of the project is taxable or exempt Supply. 2. If answer to the above is affirmative, unit sold after which date shall be treated as exempt from GST. 10. We have gone through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issues on which advance ruling required- (1) determination of the liability to pay tax on any goods or services or both. At the outset, we admit both question related to the applicant is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit the application for consideration on merits. 11. On going through the documents provided by the party, the brief facts of the case are as under- The applicant i.e. Savfab Buildtech Private Limited. Plot No. 108, Katori Mill, Loni Road, Mohan Nagar Ghaziabad, U.P. is a registered assessee under GSTN No. 09AAOCS7407E2Z2. The Applicant is engaged in developing the project Saviour Park having 1150 Units in aggregate. The said project has been divided into 4 phases. First Thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. 12. It may further be pointed out that it is not the case that GDA has not given completion certificate within a specified time and thus it may be treated as deemed completion. On the other hand the GDA vide letter dt. 27.04.2023, received on 02.05.2023, denied to issue the completion certificate. Thus, with respect to 113 units of the project, it cannot be considered as deemed completion. Here it may be further pointed out that in a single building if projects are registered under RERA as separate projects, those shall be treated as distinct projects. The applicant was engaged in the building of 1150 units in aggregate. The said project was divided in 4 phases. The first three phases have already been completed and delivered to the customers. The 4th phase was completed in two parts-169 units in one part and 113 units in second part. Here it may be pointed out that the applicant did not have any problem to obtain the completion certificate with respect to first three phases as well as with respect to Part 1 of phase 4. Since the 4th pha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haziabad Development Authority. In support of the clause first occupation , the applicant has submitted letter of possessions duly acknowledge by the customer and respective sale deeds. At this point, it is essential to underline the difference between a possession certificate and an occupancy certificate. An Occupation certificate (OC) is a certificate stating that the project has been built in accordance with all construction norms, building bye-laws, etc. It is only after a project receives an OC, can the builder apply for various utilities for the project. Whereas a possession certificate is issued to the buyer by the developer as proof of transfer of ownership. While a possession certificate signifying the transfer of possession whereas, an occupancy certificate is a green signal from local authorities that the property is fit for residence. The latter provides you with the official right to occupy the property, a guarantee not offered by the possession certificate. Thus, we find that letter of possessions cannot be substitute the occupation certificate. Thus, having letter of possessions or sale deed does not necessarily imply that first occupation has taken place. From the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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