The Gujarat Authority for Advance Ruling (AAR) has determined that the applicant is subject to 18% GST on a one-time premium received on the allotment of completed commercial units or buildings.
According to the two-member bench composed of Milind Kavatkar and Amit Kumar Mishra, the applicant’s one-time premium on the allotment of completed commercial units or buildings is a taxable supply under Section 7 of the CGST/GGST Act, 2077.
The applicant is running a business that builds immovable properties. The applicant wants to distribute developed units to potential buyers on a 90-year long-term lease basis. In point of fact, the applicant has charged GST at the applicable rate on the entirety of the consideration received for bookings made prior to BU permission, as he has received bookings for specific units prior to BU permission.
The candidate has looked for a development administering on the issue of whether the one-time premium got by the candidate on portion of a finished structure would be treated as an available stockpile or not.
According to the applicant, this is a sale of a building for which consideration has been received after a completion certificate has been issued, in accordance with S. No. The applicant’s lease of a plot for 90 years is not a “sale of land,” according to the AAR, and as a result, it does not fall within the scope of clause 5 of Schedule III of the CGST Act, 2017. Therefore, leasing commercial units for a one-time lease premium and an annual lease premium is considered a “supply” under section 7(1) of the CGST Act of 2017, which defines supply as “all forms of supply of goods or services or both,” including “sale,” “transfer,” “barter,” “exchange,” “licence,” “rental,” “lease,” or “disposal,” made or agreed to be made for a consideration by a person in the course or furtherance of business.
SRISHTI BHARDWAJ, BCOM LLB 8TH SEMESTER
