The Kerala Authority of Advance Ruling (AAR) clarified the dates of GST refund in case of cancellation of residential flats by customers.
The applicant, VKL Builders India Private Ltd. is engaged in the construction of flats in Thiruvananthapuram.
The applicant has sought the advance ruling on the issue in respect of the rate of tax for services provided to the customers for the period 01.07.2017 to 31.03.2019 as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended.
The coram of Joint Commissioner of Central Tax, Shiva Prasad, and Additional Commissioner of State Tax, Senil A.K.Rajan ruled that the services of construction of all the 12 different types of residential apartments as mentioned in the question in the project-Santhi Homes, Pothencode during the period from 01.07.2017 to 31.03.2019 is liable to GST at the rate of 18% [9% – CGST + 9% – SGST] as per Item (i) of 51 No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
The applicant has further asked that what is the value of services, for services for the period 01.07.2017 onwards for which appropriation towards an undivided share of land was already done in pre – GST period; whether the one-third deduction as provided for in Para 2 of Notification No. 11/2017 can again be taken where the value of undivided share already appropriated is lower than one-third of the total amount receivable for the project including land value.
The AAR has ruled that the provisions of Para 2 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 will apply for determining the taxable value of the services rendered for the period from 01.07.2017 and accordingly one-third of the total amount charged for the supply shall be deemed to be the value of land or undivided share of land involved in the supply.
Yet another issue raised was in the event of cancellation of residential flats by any customer, whether the relevant date for application of refund of taxes already paid on advances is to be reckoned from the date of payment voucher giving back the refund to the customer or is to be reckoned from the date of filing GSTR-3B for the month in which the tax on advances received was paid.
The AAR ruled that the relevant date for filing of refund application in the above situation is the date of payment of tax as prescribed in clause (h) of Explanation 2 of Section 54 of the CGST Act, 2017.
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