Case: Durga Projects and Infrastructure Pvt Ltd. [2019-TIOL-246-AAR-GST (Karnataka)]

The applicant is builder and have executed projects under JDA with Land Owners for an agreed ratio of built-up Area. The liability to pay tax in respect of construction services provided by applicant to land owners for the flats constructed towards land owner share shall arise in GST regime even Construction was commenced during pre-GST regime and continued under GST regime. The contention of the applicant that tax shall be applicable under GST law only on the portion of work executed under GST law is not acceptable. The time of supply shall be as per notification 4/2018-CT(Rate) i.e. on transfer of possession & value shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as there is no information as to whether the applicant has transferred the possession of the land owner’s share of flats or not in pre GST regime.

Case: MRF Ltd. [2019-TIOl-61- AAAR-Tamilnadu]

The GST paid on the commercial price payable to the suppliers is eligible for full ITC in terms of section 16 of the CGST Act. Post supply discount, which is not liable for reduction of the value of supply in view of section 15(3) of the CGST Act shall not interfere the eligibility of full ITC of tax paid by appellants to their suppliers. The contention of the original AAR proportionate reversal of the ITC is required in case of post purchase discount given by the supplier of the goods or services, is not in consonance with the legislative intent of 2nd proviso to section 16 of the Act. The buyer has discharged the GST charged on the undiscounted transaction value at the time of supply - In the circumstances, if the GST charged and paid is not reversed/refunded in whole or part subsequently in any manner or circumstances, the credit availed on the same need not be reversed. Circular No. 122/3/2010 dated 30/4/2010 and Circular No. 877/15/2008-Cx dated 17th November 2008 regarding reversal of CENVAT Credit in case of trade discount have persuasive value.