Ref. FEED- Input shared @
As briefly set out and focused on, the TN RERA Rules (Text @ http://www.cmdachennai.gov.in/pdfs/RERA-Rules-2017.pdf ) are at variance /incompatible, in material respects, with the RERA Act and the Model Rules as enacted by the central government.
One such variance / incompatibility of crucial relevance- having an adverse impact /consequence of added tax incidence, may be set out thus:
As per the scheme of provisions embodied in the central legislation (RERA Act and Rules), the terms and conditions to be agreed upon between promoter and allottees - in respect of a project which is either an 'on going project' or a new project sought to be brought within the regulatory regime- constitute a composite and indivisible contract of sale. In that, what is agreed upon is a 'composite price'; which represents the total consideration for the area of 'Apartment' and for the UDI in the land (Inclusive of common areas and facilities) appurtenant thereto . According to case law, there could be no VAT / ST or GST rightly levied in such a case.
On the contrary, under the TN RERA Rules, it has been left to the option of the parties to enter into an agreement for sale , and /or for 'construction'. It is the very same concept of twin agreements, that has been primarily the causa causans /objective behind the government - firstly, the centre and the states, conceiving of and ushering in the regime of levying- ST and VAT ; secondly, GST after the new code having come into effect. The government (s) ha s(ve) enabled sel f (ves) to go ahead with such a levy, through the dubious,- rather seriously-objected-to - ignominious gimmicks of an amendment of the Constitution and introducing the new concept of 'deemed works contract', against all odds.
For a study and understanding , in-depth, of the foregoing aspects, the thoughts and viewpoints shared through,-
a) professional websites- e.g. Taxguru.com and Lawyers club of india; and
b) social media- such as Facebook and Linkedin;
may be found to be of help and guidance.
(May cross refer , also the previous ('swamilook') Blogs (Tagged); available for viewing through Google Search.)
For ready Sample Links (random picks):
> http://vswaminathan-swamilook.blogspot.com/2017/09/rera-gst-el-al-ref-links.html
> http://vswaminathan-swamilook.blogspot.com/2018/05/tax-guru-vswami-articles-page.html
> https://www.facebook.com/swaminathanv3/posts/1463142590428689?pnref=story
> http://vswaminathan-swamilook.blogspot.com/2018/01/swamilook-blogs-on-gst-et-al.html
Inside:
http://vswaminathan-swamilook.blogspot.in/2017/10/sc-in-re-hume-pipe-study
>>>>>>>>>>>>>
GST On REALTY - swamilook blogs !
< looking back when it was kick-started >
https://taxguru.in/goods-and-service-tax/vat-booking-flats-construction-big-question-mark.html
AND, to know how the momentum has been kept -up and maintained since then - READ the EXPERTS' related write-ups in the ICAI booklet (titled- " A Comprehensive Workshop on Real Estate and Property Development " - dts.21st to 26th November 2011- released by Bangalore Branch of SIRC)
MASTER Note: Of contextual relevance is the land mark judgment of the SC >
Suraj Lamp & Industries (P) ... vs State Of Haryana ... - Indian Kanoon
(Unfinished)
As per the scheme of provisions embodied in the central legislation (RERA Act and Rules), the terms and conditions to be agreed upon between promoter and allottees - in respect of a project which is either an 'on going project' or a new project sought to be brought within the regulatory regime- constitute a composite and indivisible contract of sale. In that, what is agreed upon is a 'composite price'; which represents the total consideration for the area of 'Apartment' and for the UDI in the land (Inclusive of common areas and facilities) appurtenant thereto . According to case law, there could be no VAT / ST or GST rightly levied in such a case.
On the contrary, under the TN RERA Rules, it has been left to the option of the parties to enter into an agreement for sale , and /or for 'construction'. It is the very same concept of twin agreements, that has been primarily the causa causans /objective behind the government - firstly, the centre and the states, conceiving of and ushering in the regime of levying- ST and VAT ; secondly, GST after the new code having come into effect. The government (s) ha s(ve) enabled sel f (ves) to go ahead with such a levy, through the dubious,- rather seriously-objected-to - ignominious gimmicks of an amendment of the Constitution and introducing the new concept of 'deemed works contract', against all odds.
For a study and understanding , in-depth, of the foregoing aspects, the thoughts and viewpoints shared through,-
a) professional websites- e.g. Taxguru.com and Lawyers club of india; and
b) social media- such as Facebook and Linkedin;
may be found to be of help and guidance.
(May cross refer , also the previous ('swamilook') Blogs (Tagged); available for viewing through Google Search.)
For ready Sample Links (random picks):
> http://vswaminathan-swamilook.blogspot.com/2017/09/rera-gst-el-al-ref-links.html
> http://vswaminathan-swamilook.blogspot.com/2018/05/tax-guru-vswami-articles-page.html
> https://www.facebook.com/swaminathanv3/posts/1463142590428689?pnref=story
> http://vswaminathan-swamilook.blogspot.com/2018/01/swamilook-blogs-on-gst-et-al.html
Inside:
http://vswaminathan-swamilook.blogspot.in/2017/10/sc-in-re-hume-pipe-study
EXTRACTS from :
KEY Point (of poser) :
Is it not arguable that the levy of GST on 'ongoing' (building construction) project is illegal / illegitimate , hence ulra vires, in laying down that one-third of the consideration shall be 'DEEMED to be the 'cost of land', on a rule of thumb basis" ?
For, how /why such an arbitrary rule fixing the value of land to be excluded, and taxing the balance as for "DEEMED WORKS CONTRACT" ,- having no regard to the reality that the 'value' of land is quite likely - factually /actually - not be uniform, but vary, with no definiteness, on a case to case basis- be rightly regarded to squarely meet / fully satisfy one -the fourth -of the essential components , which, according to case law (see above), is required to be clearly and definitely ascertain -able (ed) !
KEY NOTE:
In L&T SC case @
https://indiankanoon.org/doc/38073485/
REASON < Why so strong as not to justifiably regard otherwise, quite a few of the SC cases cited / followed, especially SC in Heinz case ( https://indiankanoon.org/doc/95535966/ )could be urged to more than amply support; and, the conclusive observations of the SC in para. 43, have to be regarded to lend adequate credence /credibility for taking such a stance (?!).
<> Para 35 (excerpt) - ".... However, in cases where the statute was completely discriminatory or provides no procedural machinery for assessment and levy of tax OR WHERE IT WAS CONFISCATORY , THE COURT WOULD BE JUSTIFIED IN STRIKING IT DOWN AS UNCONSTITUTIONAL. In such cases the character of the material provisions of the impugned statute may be such as may justify the Court taking the view that in substance the taxing statute IS A CLOAK ADOPTED BY THE LEGISLATURE FOR ACHIEVING ITS CONFISCATORY PURPOSE " (FONT supplied- with double emphasis on "OR" )
The obvious implication is that, - even if were to proceed that the exclusion of land value on an arbitrary basis (see Key Point supra) meets with the mandated requirement of a procedural machinery for assessment and levy of tax, it could be still be validly urged , the levy is 'unconstitutional' on inter alia the ground that it is 'confiscatory' (verging on detestable 'tax terrorism' (extortion-ism !)of its kind, - having been rooted on convoluted logic)!
>>>>....
(Better, the apex court so declares, to restore the constitutional propriety, fully and finally, in a time-bound manner; in preference to leaving it to being litigated until the D'day of redemption!
<<<<<...............
CROSS refer (related topic) @
http://vswaminathan-swamilook.blogspot.in/2018/01/levy-of-st-gst-on-housing-complex-contd.html
Is it not arguable that the levy of GST on 'ongoing' (building construction) project is illegal / illegitimate , hence ulra vires, in laying down that one-third of the consideration shall be 'DEEMED to be the 'cost of land', on a rule of thumb basis" ?
For, how /why such an arbitrary rule fixing the value of land to be excluded, and taxing the balance as for "DEEMED WORKS CONTRACT" ,- having no regard to the reality that the 'value' of land is quite likely - factually /actually - not be uniform, but vary, with no definiteness, on a case to case basis- be rightly regarded to squarely meet / fully satisfy one -the fourth -of the essential components , which, according to case law (see above), is required to be clearly and definitely ascertain -able (ed) !
KEY NOTE:
In L&T SC case @
https://indiankanoon.org/doc/38073485/
REASON < Why so strong as not to justifiably regard otherwise, quite a few of the SC cases cited / followed, especially SC in Heinz case ( https://indiankanoon.org/doc/95535966/ )could be urged to more than amply support; and, the conclusive observations of the SC in para. 43, have to be regarded to lend adequate credence /credibility for taking such a stance (?!).
<> Para 35 (excerpt) - ".... However, in cases where the statute was completely discriminatory or provides no procedural machinery for assessment and levy of tax OR WHERE IT WAS CONFISCATORY , THE COURT WOULD BE JUSTIFIED IN STRIKING IT DOWN AS UNCONSTITUTIONAL. In such cases the character of the material provisions of the impugned statute may be such as may justify the Court taking the view that in substance the taxing statute IS A CLOAK ADOPTED BY THE LEGISLATURE FOR ACHIEVING ITS CONFISCATORY PURPOSE " (FONT supplied- with double emphasis on "OR" )
The obvious implication is that, - even if were to proceed that the exclusion of land value on an arbitrary basis (see Key Point supra) meets with the mandated requirement of a procedural machinery for assessment and levy of tax, it could be still be validly urged , the levy is 'unconstitutional' on inter alia the ground that it is 'confiscatory' (verging on detestable 'tax terrorism' (extortion-ism !)of its kind, - having been rooted on convoluted logic)!
>>>>....
(Better, the apex court so declares, to restore the constitutional propriety, fully and finally, in a time-bound manner; in preference to leaving it to being litigated until the D'day of redemption!
FOR personal FEED- input ,- to provoke more incisive thoughts- look up the since updated Post@http://vswaminathan-swamilook.blogspot.com/2018/06/gst-back-drop.html )
<<<<<...............
CROSS refer (related topic) @
http://vswaminathan-swamilook.blogspot.in/2018/01/levy-of-st-gst-on-housing-complex-contd.html
>>>>>>>>>>>>>
GST On REALTY - swamilook blogs !
< looking back when it was kick-started >
https://taxguru.in/goods-and-service-tax/vat-booking-flats-construction-big-question-mark.html
AND, to know how the momentum has been kept -up and maintained since then - READ the EXPERTS' related write-ups in the ICAI booklet (titled- " A Comprehensive Workshop on Real Estate and Property Development " - dts.21st to 26th November 2011- released by Bangalore Branch of SIRC)
MASTER Note: Of contextual relevance is the land mark judgment of the SC >
Suraj Lamp & Industries (P) ... vs State Of Haryana ... - Indian Kanoon
The propositions as clinched and conclusively settled by the apex court,which are of direct relevance and indisputable application to the context herein, may be briefly stated thus:
1. Property , the so called Flat/Apartment, sold together with UDI is an 'immovable property' ; and
2. Sale and conveyance of the property , and registration thereof, with stamp duty paid, are imperative in order that the purchaser acquires full and absolute ownership rights / interests (i.e. the TITLE) , to the exclusion of the others.
RELATED (needs cross reference) >
(Unfinished)
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