The Government of India, through the Ministry of Finance, Department of Revenue, has issued Notification No. 15/2023-Central Tax (Rate) on the 19th of October, 2023. This notification introduces significant changes to the tax provisions under the Central Goods and Services Tax Act, 2017 (12 of 2017). In this article, we will provide an in-depth analysis of these amendments and their implications.
Detailed Analysis:
1. Amendment to the Opening Paragraph: The notification revises the opening paragraph of the earlier notification. It broadens the scope of what is considered taxable under the Central Goods and Services Tax Act. Specifically, it pertains to the “construction of a complex, building, or a part thereof, intended for sale to a buyer.” The change clarifies that the tax will apply to such construction projects where the amount charged includes the value of land or an undivided share of land, unless the entire consideration is received after the issuance of a completion certificate or after the first occupation, whichever is earlier.
2. Scope and Impact: This amendment expands the tax implications for the construction and real estate sector. It aims to ensure that transactions involving the sale of constructed properties are subject to the appropriate tax, particularly when the value of land is included in the transaction. The conditions regarding the issuance of a completion certificate or the first occupation are vital for determining the timing of tax liability.
3. Effective Date: The changes brought about by this notification will be enforced from the 20th of October, 2023. Entities involved in the construction and real estate business need to adapt to these new tax regulations promptly.
Conclusion:
The Government of India, under the Ministry of Finance, Department of Revenue, has issued Notification No. 15/2023-Central Tax (Rate), which modifies the tax provisions of the Central Goods and Services Tax Act, 2017. These changes primarily pertain to the taxation of construction projects, especially those intended for sale to buyers, where the transaction includes the value of land. The amendment specifies that tax liability will apply unless the entire consideration has been received after the issuance of a completion certificate or after the first occupation, whichever is earlier.
This notification will be effective from the 20th of October, 2023, and entities involved in the construction and real estate sectors must ensure compliance with the new tax regulations. Staying informed about these changes is crucial to avoid potential legal and financial repercussions.
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 15/2023-Central Tax (Rate) | Dated: 19th October, 2023
New Delhi, the 19th October, 2023
G.S.R.768(E).– In exercise of the powers conferred by sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 15/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 694(E), dated the 28th June, 2017, namely:-
In the said notification, in opening paragraph , for the words, brackets, letters and figures “specified in sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act”, the words, “of construction of a complex, building or a part thereof, intended for sale to a buyer, wholly or partly, where the amount charged from the recipient of service includes the value of land or undivided share of land, as the case may be, except where the entire consideration has been received after issuance of completion certificate , where required , by the competent authority or after its first occupation , whichever is earlier”, shall be substituted.
2. This notification shall come into force with effect from the 20th October, 2023.
[F.No. CBIC-1 90354/1 95/2023-TO (TRU-I I)-CBEC]
(Rajeev Ranjan)
Under Secretary to the Government of India
Note:-The principal Notification No. 15/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 694(E),dated the 28th June, 2017.
