GST payable upon transfer of ownership / rights in the building to the person providing the development rights
In Re: M / s. Vajra Infracorp India Private Limited [TSAAR Order No.03/2021 decided on July 19, 2021] where the appraised is a provider of taxable construction services for residential complexes.
The appraiser entered into a supplemental agreement with the owner on May 15, 2017 (pre-GST) duly setting the total number of apartments to be shared with the land owner and construction was expected to be completed by October / November 2018 ( post-GST).
The appraiser requested clarification on the time of delivery and the taxation point with respect to the homes assigned to the owner of the land by the builder through a supplementary agreement.
The AAR, Telangana maintained that according to Notification No 4/2018 – Central Rate dated January 25, 2018 the date of transmission of possession of the property or of the right over it to whoever supplies the urbanization rights will be the time of supply and the obligation to pay the tax on said services will arise on that day. The time of supply will not be at any other time.
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