Goods and Services Tax – Started By: – hubert fernandes – Dated:- 19-8-2017 Last Replied Date:- 21-6-2018 – We undertake construction of residential complex and shall avail ITC on inputs. We however have doubt on inputs used on a project after its completion / occupancy certificate from local authorities.The above can be elaborated with the following case example Assumption : Project 1 is one among the other on going projectsProject 1 consisting of 100 flats, wherein occupancy certificate from local authorities is obtained say on 1/9/2017. On the day of occupancy out of the 100 flats say 70 flats have been sold and the receivables as per payment schedule of these 70 flats are 95 % of consideration value as indicated in agreement. However on the day of occupancy certificate an estimated of 90% of the cost of construction is complete and balance 10% works gets executed and completed before the physical possession of these flats . (say 3-4 months wef 01/09/17)The issue is whether ITC on
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irship fees Please advise us on the above so that ITC can be rightly captured at invoice level – Reply By RAMESH PRAJAPATI – The Reply = ITC is allowed on taxable turnover only. ITC should be reversed proportionately in respect of exempt supply. – Reply By Ganeshan Kalyani – The Reply = Dear builders , reduce the price of the project post GST as seemless flow of credit is there. Yes proportionate credit is allowed. – Reply By KASTURI SETHI – The Reply = I agree with the views of Sh.Prajapati, Sir. His brief reply covers all your points. I further add para-wise as under:- (a) Not admissible. (b) Does not agree sale factor is there. (c) Yes. Audit fee and retainer-ship fee would be considered ineligible. This is the legal position explained above. Now I deviate somewhat and discuss your issue logically. As per Section 66 (E)(b) of the Finance Act, 1994 and Schedule-II of Section 7 of CGST Act, 2017 the conditional nature of exemption from Service Tax/GST remains the same whether it is pr
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nt of service has disappeared. How practically is it feasible that service has been converted into sale by mere factum of timing of receipt of consideration ? The legal status of service cannot be changed into sale or vice versa by any stretch of imagination. There is no co-relation between incidence of service (now supply) and time-factor of receipt of entire consideration. How can the factum of time factor determine the fate of consumer, builders or contractor or the whole nation in the interest of revenue ? The essence of definition of service whether in pre-GST era or post GST era remains almost the same. Time factor of receipt of consideration cannot prevail over the definition of service, if it prevails, it is contradictory and can be termed as flaw in the law or unconstitutional. In view of time factor involved, time factor cannot override definition of Service and supply . Can any house/ flat/ building be constructed without service i.e. site preparation service, architect'
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