PLS different from construction service - Attracts 18%GST

By -



The Appellate Authority for Advance Rulings (AAAR) of Haryana has ruled that preferential location service (PLS) is different from construction and will attract GST at the rate of 18 per cent.

PLS is an additional consideration collected along with consideration for sale of properties attracts GST rate of 18 per cent where sale/transfer of constructed property has taken place before issuance of completion/occupation certificate (CC/OC) the AAAR opined while disposing an appeal application filed by realty major DLF. 

PLS helps buyers get a directional advantage or floor rise, and attracts a preferred location charge (PLC) that is levied for units that are better located than others in the same premises, such as the ones facing a park, open area or even corner flats.

This amount collected is over and above the basic sales price (BSP) and hence cannot be considered as part of construction service

The West Bengal Appellate Authority for Advance Ruling had ruled earlier, while also adding that the same would hold good for the right to use of parking space.(!)

In 2019, the AAAR of West Bengal held that the very transaction mechanism of PLS is that the builder charges a separate consideration from the buyer for choosing a particular floor/location advantage.

Thus, the abatement, which is allowed on construction service with respect to land on which construction is done, cannot be extended to PLS as it is altogether a separate service having no association with land.

This ruling was quoted by AAAR of Haryana and said PLS will attract GST at the rate of 18%

Constructing Complexities in Complex Construction

😆


SRIVATSAN.R.

NACIN, CHENNAI

Comments

Post a Comment

Popular posts from this blog

GST not applicable on transfer of Jaipur International airport business to Adani group: AAR-Rajastan

By -
Image
The transfer of Jaipur international airport operations by Airports Authority of India (AAI) to the M/s. Adani Jaipur International Airport Limited *is exempted from Goods and Services Tax (GST)*, as per the ruling of the Authority for Advance Ruling.  In its business transfer arrangement entered vide agreement dated January 16, 2021, between the applicant Airport Authority of India (AAI) and M/s. Adani Jaipur International Airport Limited (a Special Purpose Vehicle) the operations of Jaipur Airport has been transferred as a 'going concern' and consequently the Adani Group had in October, 2021, have taken over the operations, management, and development of the Jaipur International Airport from the AAI. The airport has been leased out to the group by the government of India for a period of 50 years. The AAI had approached the Rajasthan bench of the Authority for Advance Ruling (AAR) seeking a ruling on  " Whether a transfer of the business to Adani Jaipur International Airp...
Read more

Shift from "Registered brand" to "Pre-packaged and Labelled" on Specified goods

By -
Image
Background: Specified goods on which "registered brand or brand in respect of which an actionable claim or enforceable right in a court of law is available" was one of the most spoken challenges at the inception of GST regime as it was attracting 5% GST especially in case of  pulses, cereals like rice, wheat, and flour (aata), etc. Later on this scenario was further evolved vide Notification No.28/2017 Central Tax Rate dt.22.09.2017  wherein if you file an  affidavit for foregoing an actionable claim or enforceable right on a brand name, it will not be taxed under GST. This created a mad rush among those manufacturers and traders to opt for it, and to stay away from the tax net.   It is learnt that the Group of Ministers (GoM) reviewing the GST rates in this context has decided to remove exemption for packaged food items, if sold under unregistered brands. The GoM’s decision follows Tripura High Court’s judgement wherein the court upheld the tax demand on t...
Read more