Levy of GST — Land development agreement— applicant filed this instant application seeking advance ruling on the following issues—
(a) 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?
(b) If there is liability to pay GST on what value is the GST to be paid since there is no monetary consideration involved?
(c) Is the applicant liable to pay service tax up to 30.06.2017 and GST thereafter?
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. 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.
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-Central Tax (Rate) dated 28.06.2017.
It is clearly evident from Section that the service tax is liable to be paid, which is leviable under the Finance Act' 1994, on the services provided up to Also the GST is liable to be paid under the CGST Act'2017 /KGST Act'2017, on the services provided after 01.07.2017. Therefore we are of the opinion that the Applicant has to pay service tax / GST proportionate to the services provided before / after respectively.
Ruling—(a) 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.
(b) The value on which the applicant is liable to pay GST is to be determined in terms of para 2 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
(c) The Applicant is liable to pay service tax / GST proportionate to the services provided before / after 30.06.2017 respectively. — Nforce Infrastructure India Pvt. Ltd, In Re — [2018] 6 TAXLOK.COM 58 (AAR-Karnataka)