Question
I own a property and if I want to make a factory I can charge GST on it? If I charge a GST, can I raise the amount in advance? If I have already received the amount, can I get the benefit of the completion certification?


Answer
Facts of the Case:
You own a property and you are constructing a factory and selling the same. whether GST is liable or not.

Law Applicable:
SCHEDULE II OF CGST ACT

5. Supply of services
(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.

SCHEDULE III OF CGST ACT

                   ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICE

5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

Interpretation:
As per schedule II Construction of Building (factory) intented for sale is supply of service except where the entire consideration has been received after issuance of completion certificate.

Therefore if you have received any advance or part payment before completion certificate then it is considered as supply of service as per Schedule II. However if entire consideration is received after issuance of completion certificate then only it is considered as sale of building and outside GST as per Schedule III.

Conclusion:
Construction of Building (factory) intented for sale is supply of service except where the entire consideration has been received after issuance of completion certificate. As you have received consideration in advance then it is taxable supply and you are not eligible for benefit related to completion certificate.

 

(Reply dt.27/06/2019)