Sale of Apartments prior to Nov 8, 2019 can’t be treated as Supply under GST: AAR [Read Order]

The Kerala Authority of Advance Ruling (AAR) ruled that the sale of apartments prior to November 8, 2019 cannot be treated as supply under GST.

The applicant, Confederation of Real Estate Developers Association of India (CREDAI) was established in the year 1999 with the charter for policy advocacy in favour of housing and real estate. They are the prime knowledge sharing forum for latest industry data, technological advancements and industry benchmarks. They have emerged as the preferred platform with regard to national discourse on housing and habitat through strong networking with Government, policy makers, investors, financial institutions and real estate developers.

In the light of the evolving provisions of goods and services tax the members of the applicant engaged in the activity of construction and sale of apartments have queries regarding the date of completion of an apartment within the State of Kerala for the purpose of determining whether the transaction of sale of apartment would be treated as supply attracting GST liability under the CGST Act.

The applicant sought the advance ruling on the issue whether prior to November 8, 2019 the activity of sale of apartment undertaken by the applicant would be treated as supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after submission of completion certificate in Form Appendix F issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in Form Appendix H as per Rule 22 of the Kerala Municipality Building Rules, 1999 but before expiry of 15 days from the date of such submission.

Yet another issue raised was whether prior to 08.11.2019 the activity of sale of apartment undertaken by the applicant would be treated as supply to determine GST liability, if the agreement for sale of the apartment is entered into by the applicant and entire consideration towards said sale is received from the customer after expiry of 15 days from the date of submission of completion certificate in Form Appendix F issued by the Registered Architect / Engineer / Supervisor to the Secretary for obtaining occupancy certificate in the Form Appendix H as per Rule 22 of the Kerala Municipality Building Rules, 1999.

The coram of Members Sivaprasad and Senil K.Rajan held that if the entire consideration in respect of the transaction is received after submission of the completion certificate in Form Appendix F to the Secretary as per Rule 22 of the Kerala Municipality Building Rules, 1999 the transaction shall not be treated as supply under GST in view of provisions contained in Paragraph 5 of Schedule III of the CGST Act, 2017.

“If the entire consideration in respect of the transaction is received after submission of the completion certificate in Form Appendix F to the Secretary as per Rule 22 of the Kerala Municipality Building Rules, 1999 the transaction shall not be treated as supply under GST in view of provisions contained in Paragraph 5 of Schedule III of the CGST Act, 2017,” the AAR added.

To Read the full text of the Order CLICK HERE

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