GST
TRT-2025-
Madras High Court
Date:-24-04-23
In:-
Issue Favourable to Tax Payer ?:-
Parties: M/s.Avigna Properties Pvt. Ltd. Vs State Tax Officer
Facts –
- The Petitioner, M/s.Avigna Properties Pvt. Ltd., engaged in the business of supply of construction services as well as works contract relating to immovable property. It had launched a residential township project called 'Avigna Properties' in Mahindra World City.
- In respect of periods 2017 to March 2019, show-cause notices were issued to the petitioner alleged short payment of output tax qua supply of construction services.
- The assessing authority concludes that the Notification does not permit distinguishing of sale of land and supply of construction services and in cases of composite construction, a 70:30 formula is liable to be adopted.
Issue –
- Whether Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 would be applicable in case of transfer of property in land or undivided share of land?
Order –
- The Divisional Bench of Hon’ble High Court observed that Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 would be applicable only in cases where the assessee is unable to supply the bifurcation of the construction as relatable to construction services or sale of land.
- The methodology set out under the Notification as relatable to construction services, is for bifurcation of the total consideration by way of a deeming fiction, to arrive at the deemed amount attributable to construction services and land costs. The deeming fiction would not apply in cases where the assessee is in a position to supply the actual amount of the consideration received towards construction services and land cost.
- In the present case, such evidences are available with it, though, as learned Standing Counsel points out, such particulars do not appear to have been actually produced before the authority. The officer could well have sought such particulars instead of proceeding on the basis that the Notification would be applicable in all cases of property development as he has done.
- In an event where the officer is of the view that the attribution adopted by an assessee is unsupported by hard evidences or the documents produced do not satisfies him that the attribution has been made in an appropriate manner commensurate with business practices and costs in that particular area, he is always at liberty to seek more particulars or to apply the deeming fiction as per the Notification, rejecting the attribution made by the assessee.
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