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Selling of Residential Flats after Date of Completion Certificate of Commercial Shops or after first occupancy in building isn’t Exempt Supply: AAR

AAR - GST - residential flats - commercial shops - exempt supply - Taxscan

The Gujarat Authority of Advance Ruling (AAR) ruled that selling of residential flats after the date of completion certificate of commercial shops or after first occupancy in a building is not exempt supply.

The applicant, M/s V 2 Realty is engaged in the construction business. Their project V2 Signature is going on at Chala, Vapi. The ground and First Floor in all wings of their project are commercial shops. The remaining floors are residential flats. Further, submitted that they have received BUP (Completion Certificate) for commercial shops i.e. Ground and First floors.

Therefore, they are not liable to pay GST on new commercial bookings.

The applicant sought Advance Ruling on the issues whether the selling of residential flats after the date of completion certificate of commercial shops or after first occupancy in building is an exempt supply.

The other issue raised was in respect of the manner of reversal of ITC on expenses incurred up to date of completion certificate shops and the manner of claiming ITC on expenses incurred after the date of completion certificate of commercial shops.

The two-member bench of Sanjay Saxena and Mohit Agarwal ruled that selling of residential flats after the date of completion certificate of commercial shops or after first occupancy in a building is not exempt supply.

The AAR said that the manner of reversal of ITC on expenses incurred up to date of completion certificate shops has been provided under Sections 16 and 17 of CGST Act, 2017 read with Rules 42 and 43 of CGST Rules, 2017 read with Notification No. 16/2019-CT dated March 29, 2019.

 While addressing the last issue, the AAR said that the manner of claiming Input Tax Credit has been provided under Sections 16 and 17 of the CGST Act, 2017 read with Rules 42 and 43 of CGST Rules, 2017 read with Notification No. 16/2019-CT dated March 29, 2019.

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