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CA Intermediate · Taxation · Supply under GST

Anand Constructions, a registered builder in Hyderabad, sells a flat to a buyer, with the completion certificate issued before the sale and the entire consideration received after that. Separately, it receives Rs 10 lakh on a different flat when construction is ongoing. Under Schedule II, how are these treated?

The sale of a flat after the completion certificate, with the full price received after that date, is neither goods nor services under Schedule III. Receipts for a flat sold during construction are a supply of service under Schedule II.

  1. ABoth are supply of services
  2. BBoth are supply of goods
  3. CThe sale after the completion certificate is neither a supply of goods nor services, while the sale during construction is a supply of serviceCorrect
  4. DThe sale after the completion certificate is a supply of goods, while the sale during construction is a supply of service

Explanation

Schedule III excludes sale of building after issue of completion certificate (or first occupation) where the entire consideration is received after that date, except to the extent Section 9(5) applies. Construction of a complex intended for sale before the completion certificate is a supply of service under Schedule II. Hence the ongoing flat is a service; the completed flat is outside supply.

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