2018 (12) TMI 534 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2019 (20) G. S. T. L. 184 (A. A. R. – GST) – Levy of GST – value of building constructed and handed over to the land owner in terms of the Joint Development Agreement – value of GST to be paid since there is no monetary consideration involved – Liability of service tax up to 30.06.2017.
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Held that:- In the instant case the applicant, a registered person, is supplying the construction service of building / civil structure to supplier of the development rights (the land owner) against consideration in the form of transfer of development rights. N/N. 4/2018-Central Tax (Rate) dated 25.01.2018, at para (b), stipulates that the supplier of construction service, to the supplier of development rights, is liable to pay GST for the service provided to the land owner in terms of the Joint Development Agreement – The applicant needs to pay tax towards the construction service provided to the land owner, on the value to be determ
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ded before / after 30.06.2017 respectively. – AAR No. KAR ADRG 30/2018 Dated:- 28-11-2018 – SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER Represented by Sri. Rudolph M C Rodrigues, Chartered Accountant ORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF KARNATAKA GOODS AND SERVICES TAX ACT, 2017 M/s. Nforce Infrastructure India Pvt. Ltd., Victoria, Near Valencia Church, Kankanady, Dakshina Kannada, Mangalore – 575 002, Karnataka (herein after referred to as Applicant) having GSTIN number 29AADCN3089J1Z0, have filed an application, on 17.03.2018, for advance ruling under Section 97 of CGST Act,2017, KGST Act, 2017 & IGST Act, 2017 read with rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01, discharging the fee of ₹ 10.000/- (CGST – ₹ 5,000/- & SGST – ₹ 5,000/-), vide challan bearing CIN number ICICI 18022900287680 dated 21.02.2018. 2. The Applicant, M/s. Enfo
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is instant application seeking advance ruling on the following issues 1. Whether the applicant is liable to pay GST on the value of building constructed and handed over to the land owner in terms of the Joint Development Agreement ? 2. If there is liability to pay GST on what value is the GST to be paid since there is no monetary consideration involved? 3. Is the applicant liable to pay service tax up to 30.06.2017 and GST thereafter? PERSONAL HEARING: / PROCEEDINGS HELD ON 03.04.2018. 4. The Applicant submitted power of attorney, issued by Sri, Ivan Mark Sequeira, Managing Director, M/S Nforce Infrastructure India Pvt. Ltd., authorizing Sri. Rudolpoh M C Rodrigues, Chartered Accountant to represent the applicant before the Authority for Advance Ruling in connection with the instant application for Advance Ruling. The said authorized representative appeared for personal hearing proceedings and submitted that the Joint Development Agreement had been entered into in January 2016, for con
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y to pay GST on what value is the GST to be paid since there is no monetary consideration involved? 3. Is the applicant liable to pay service tax up to 30.06.2017 and GST thereafter? 7. Notification No.4/2018-Central Tax (Rate) dated 25.01.2018, notifies the following classes of registered persons, namely a) Registered persons who supply development rights to a developers builder, construction company or any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure; and b) Registered persons who supply construction service of complex, building or civil structure to supplier of development rights against consideration, wholly or partly, in the form of transfer of development rights, as the registered persons in whose case the liability to pay central tax on supply of the said services, on the consideration received in the form of construction service referred to in clause (a) above and in the form of deve
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rescribed; Section 22 of the CGST Act 2017 tells about the persons liable for registration and stipulates that Every supplier, who makes a taxable supply of goods or services or both, shall be liable to be registered, if his aggregate turnover crosses the threshold limit prescribed in the Act. 9. In the instant case the applicant, a registered person, is supplying the construction service of building / civil structure to supplier of the development rights (the land owner) against consideration in the form of transfer of development rights. Notification No.4/2018-Central Tax (Rate) dated 25.01.2018, at para (b), stipulates that the supplier of construction service, to the supplier of development rights, is liable to pay GST for the service provided to the land owner in terms of the Joint Development Agreement. 10. The applicant needs to pay tax towards the construction service provided to the land owner, on the value to be determined in terms of para 2 of the Notification No.11/2017-Cen
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ion 142 (11) of the CGST/ KGST Act 2017, which is appended below : (11) (a) notwithstanding anything contained in section 12 no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State; (b) notwithstanding anything contained in Section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994; (c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed. 12. It is clearly evident from Section that the service tax is liable to be paid, which is leviable under the Finance Act'
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