Question ID : 20185

Transition Credit- 142(11)(c)

We are into construction of residential flats and in the month of June17 we have entered into JDA ( Joint development Agreement) with the land owners where in out of the total flats to be constructed few of them are ear markedallocated. This has taken place on 23rd Jun17 and as per Rule 3 of point of taxation of ST, the liability arises on the services provided to the land owner at the time of receipt of advance in the form of LandDevelopment rights. Since we have received the consideration (landdevelopment rights) before construction of the flats, this is treated as " Advance" and ST has been paid accordingly @ 4.5 (considering 70 abatement, 262012). My query is As per sec.142(11)(c) of CGST act (Transition Provisions), is it mandatory to avail this ST paid as transition credit and pay GST @ 18 on the total value under GST. The actual supply ie. construction of flats and sharing the final flats ( as agreed in JDA) to land lord will happen after 2-3 years.

posted by CA Vamsi Krishna on Sep 25 2017 12:00AM