In re Kedaram Trade Centre (GST AAR Gujarat)
(i) Whether one time premium received by the applicant on allotment of completed building would be treated as taxable supply or not?
The one time premium received by the applicant on allotment of completed commercial units/building is taxable supply in terms of section 7 of the CGST/GGST Act, 2017.
(ii) In case the supply is treated as taxable supply, what will be the applicable rate of tax.
The supply of the applicant is classified under SAC 9972 and would be leviable to tax at the rate of 18% (i.e. 9% CGST and 9% SGST) in terms of notification No. 11/2017-Central Tax (Rate) dated 28.6.2017
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
Brief facts:
M/s. Kedaram Trade Centre, 15, Nest Bungalows, Ground floor, Nr. Narmada Vasahat, Satellite, Ahmedabad 380 015 [for short —`applicant’] is registered under GST and their GSTIN is 24AAVFK7137P1ZC.
2. The applicant is engaged in the business relating to construction of immovable properties.
3. Government of Gujarat, acting through Gujarat State Road Transport Corporation [for short —`GSRTC’] decided to develop the area admeasuring 58370 sq. mtrs. of TP scheme no. 2 of Kankaria through private sector participant on commercial build, operate and transfer basis.
4. Vide concession agreement dated 12.5.2011 between GSRTC and Hubtown Bus Terminal (Ahmedabad) P Ltd, [for short `Hubtownl, GSRTC granted development rights to Hubtown, in the manner set out in the concession agreement. Out of the development rights for the total area of land, Hubtown executed a deed of assignment dated 3.3.2021 with the applicant, who acquired development rights for development of commercial units on plot admeasuring 1670 sq. mtrs. through the said deed of assignment dated 3.3.2021.
5. The applicant has undertaken development of the project as per the approved plans and has developed commercial unit. Upon duly completing the construction and development of the project the Ahmedabad Municipal Corporation has issued the BU permission on 25.5.2022.
6. The applicant wishes to allot developed units to prospective buyers on a long term lease basis for a period of 90 years. The applicant in fact has received booking for the certain units before getting BU permission and he has charged the GST at the applicable rate on the entire amount of the consideration received for the booking done before BU permission.
7. The lease deed shall be executed by and between the following parties viz
