2020-VIL-10-AAAR

SGST AAAR

GST – Maharashtra AAAR - whether the activity of granting long term lease of the residential apartment would amount to transfer of immovable property and hence not liable to GST or taxable supply in the form of construction of complex/building/civil structure or a part thereof including a complexes or buildings for which consideration is received by the appellant in installments and therefore it is a composite supply of Works Contract covered u/s 2(119) of the CGST Act, 2017 – HELD – in the subject case, there is a composite supply of works contract for construction of flat, which is intended to be handed over to the buyer, but the transaction is projected as if it is a lease transaction - Though the appellant in the draft agreement has projected the said transaction as a lease transaction of residential unit in an apartment/building and has also drafted agreement in such a way to project it as a lease transaction, the said transaction cannot be a lease transaction but it is an agreement for construction of residential flats - the clauses in the agreement though purported to be a lease agreement as clauses which are in complete disharmony with a normal lease transaction - in the present case, the agreement has taken place during the construction of the project and the lease payments are made slab wise before the completion of the project. This almost never happens in the lease of a flat or a unit – the AAR has rightly concluded that the said supply is a taxable supply of Works Contract covered under section 2(119) of the CGST Act, 2017 and not a lease transaction – The appeal is dismissed

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