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LEGAL UPDATE

Legal

Cases

No GST if amount received received by him post issuance of issuance of completion certificate."
completion certificate will attract GST. The Authority noted that share of
after issuance of completion units/flats was received by the
He contended that the liability to pay
certificate GST by him would not arise as he had applicant after issuance of completion
Karnataka's Authority for Advance not entered into any agreement with certificate.
Ruling (AAR) has upheld that amounts the prospective buyers before "The amount received by the
received for sale of shares in flats will receiving the completion certificate applicant, either by himself or through
not attract Goods & Services Tax (GST) from the competitive authority. He his agents towards sale of their share
in case the entire consideration is paid further stated that one clause of the of flats, is not eligible for GST, if and
after issuance of completion agreement with the developers only if the entire consideration related
certificate. restricts his right to execute any sale to such flats is received after the
This ruling has persuasive powers in agreements or conveyancing deeds till issuance of completion certificate,"
he takes over the units and the AARsaid in the order.
matters related to sale and purchase
of flats or building. The consideration occupancy certificate is issued. Sridhar
is paid either during construction or had no occasion to enter into any CBI books firm for Rs. 8000
post construction and after the transaction for transferring his right, crore bank fraud
completion certificates are issued. The title or interest in respect of his share
law prescribes applicability of GST of the flats till the occupancy The CBI has booked Hyderabad-based
before issuance of completion certificate was issued by the Transstroy (India) Ltd and its directors
certificate. Still, doubts have been concerned authority. for alleged bank fraud of over Rs 7,926
crore in a consortium led by Canara
raised from time to time because of Accordingly, he said he is not liable to
different payment systems prevailing pay GST in respect of 40 per cent of Bank, in one of the biggest banking
at various places. super built area received by him. scams in the country, officials said.
The agency carried out searches at the
In the said matter, Bengaluru-based After going through the facts, AAR
resident BR Sridhar tied up with a highlighted clause 5 (b) of the Schedule premises of the company and the
developer for construction of II of the CGST Act 2017, which says, accused directors, including former
Telugu Desam Party (TDP) MP
residential flats on his immovable "Construction of a complex, building,
Rayapati Sambasiva Rao, which led to
property. It was decided that upon civil structure or a part thereof,
development of the said property, he including a complex or building the recovery of incriminating
will get 40 per cent share of undivided intended for sale to a buyer, wholly or documents, its spokesperson said in a
right, title and interest in the land. partly shall be treated as supply of statement.
Sridhar approached AAR with a specific services except where the entire Rao, an additional director in the
question as to whether the amount consideration has been received after company, has been named in the FIR

20 | 2021 | JANUARY | BANKING FINANCE