Valuation under GST— Section 15 of CGST Act— In the instant case, the applicant is an individual and is not registered under GST, but intends to start business as service provider in construction and sale of commercial immovable properties.

The applicant has sought advance ruling in respect of the following question:-

i. Determination of the taxable value under GST Act, 2017 of Immovable Constructed Commercial Property without any occupancy or Completion Certificate where the area of the land exceeds 500 square meters or the number of Apartments proposed to be developed exceeds 8 inclusive of all phases particularly when the actual Guidance value fixed by the Competent Government Authority is more than the Value of Sale Consideration stated in the absolute Sale Deed registered by the Builder in favour of the Purchaser.

The applicant has sought clarification about determination of taxable value of commercial immovable property for the purpose of GST liability i.e whether the sale consideration mentioned in the sale deed between builder and proposed purchaser or guidance value fixed by the state government authorities for the purpose of registration should be considered as taxable value for the purpose of GST liability.

The GST Act contemplates to treat the transaction value as the value of supply unless the same is rejected and the value determined as per Section 15 of the GST Act. It does not contemplate to consider a guidance value prescribed under another legislation to be deemed to be the value of the supply, unless the transaction value itself is disputed and found not acceptable under Section 15 of the GST Act. In the latter case, the determination of the value of such supply shall be made as per the provisions of Section 15 of the GST Act.

However, in case of apartments, the land value is fixed at one third of the value of the apartment involving the transfer of land along with the building, in Notification No.11/2017-Central Tax (Rate) dated 28.06.2017. In such cases, the value of land is calculated as per the above specification and no other value is acceptable for the said land value.

Held that— The taxable value under the GST Act of construction of immovable plots without occupancy certificate needs to be determined as per the transaction value and such value if found to be not acceptable, has to be determined as per the principles laid down under Section 15 of the GST Act, 2017.