Facts –

• The Applicant, M/s. Godrej Properties Limited, own non-agricultural undeveloped immovable property and is now developing the Property III to be registered as "Godrej Woodland-Phase III" which shall comprise of 266 residential plots.
• The applicant states that the sale consideration of the plots includes consideration towards plot of land, development of basic infrastructure prescribed by authorities in the approved plan as well as cost for providing all other common facilities, amenities and specifications to be provided within the project.
• The applicant upon obtaining the Release Certificate from the competent authority shall offer in writing the possession of the plot, to the purchaser/s in terms of the draft agreement for sale, to be taken within two months from the date of issue of release certificate as per RERA Act.

Issue –

• Whether GST is applicable on booking of plot, receipt of consideration and agreement for sale is entered as well as sale deed is executed after and prior to the release certificate?

Order –

• The AAR observed that as far as consideration towards the plot area is concerned, it is clear that the same is covered under entry 5 of Schedule III, and hence the transaction shall be treated neither as a supply of goods nor a supply of services.
• The basic infrastructure facilities are mandatory requirement for release of plots and the plots become the saleable plots only after the provision of these basic infrastructure and facilities. Hence they are a part and parcel of the consideration for the plot though collected and shown separately. Hence the consideration collected towards basic infrastructure development is part of the consideration towards the plot and is not a consideration for a separate supply.
• It can be seen that the Club House and other common amenities are provided as a service with no transfer of title to land or buildings and hence would not be covered under entry 5 of Schedule III of the CGST Act. The ownership rights on the above facilities are found to be still remaining with the Promoter and the Promoter can assign these facilities to anyone of his choice and the Purchaser is only provided with access rights. Hence this provision of access rights for a separate consideration would definitely form a separate supply under the provisions of Section 7(1) of the CGST Act, 2017.
• As far as corpus fund is concerned, it would be in the nature of a deposit and is not a part of consideration for a supply at the point of collection but when the same is applied to an expense, the supply would be constituted and would be taxable.