Under Schedule-II Para 5(b), construction of a complex, building, civil structure or part thereof — including a complex or building intended for sale to a buyer (wholly or partly) — is supply of services, unless the entire consideration is received after the earlier of:
Issuance of Completion Certificate by the competent authority, OR
First occupation.
## The Decision Rule
```
Key date = Earlier of (Completion Certificate, First Occupation)
```
Consideration timing
Treatment
Entire consideration received after the key date
Not a supply (Schedule-III)
Any part received before the key date
Full value is supply of services
Critical: Even ₹ 1 received before the key date taints the full transaction — the entire value becomes a taxable supply of service.
## Why This Matters
Once complete and first occupied/CC-issued, a building is treated like 'sale of land/building' → Schedule-III → not a supply.
If sold off-plan or during construction with any advance taken, GST applies on the whole value.
Worked example
### Example 1
Q. A Ltd. completes a 10-flat project. Completion Certificate received 01/09/2024 and first occupation 01/03/2025. Sales:
• 07/11/2022: 4 flats to X Ltd. @ ₹ 50L each = ₹ 2 cr
• 01/12/2024: 6 flats to Y Ltd. @ ₹ 50L each = ₹ 3 cr
A. Key date = earlier of CC (01/09/2024) and first occupation (01/03/2025) = 01/09/2024.
• 4 flats to X Ltd. — consideration received 07/11/2022, i.e. before 01/09/2024 → supply of services on ₹ 2 cr.
• 6 flats to Y Ltd. — entire consideration received 01/12/2024, after 01/09/2024 → Not a supply (Schedule-III).
### Example 2
Q. Same project, but sales pattern:
• 07/11/2022: 10 flats to X Ltd. @ ₹ 20L each = ₹ 2 cr (advance)
A. Each flat had partial consideration received before 01/09/2024. The pre-CC receipt taints the entire transaction. Total ₹ 5 cr (₹ 2 cr + ₹ 3 cr) is supply of services.
⚠️ Common exam mistakes
Splitting the consideration into pre-CC and post-CC portions for tax — once any part is pre-CC, the full value is taxable.
Using the later of CC and first occupation — the rule is the EARLIER of the two.
Treating completed-and-sold flats (entirely post-CC payment) as taxable — they fall in Schedule-III.
Forgetting that the rule applies per flat/unit, not for the project as a whole.
Bare-Act text Schedule-II, Para 5(b) · CGST Act, 2017 · click to expand
Schedule-II, Para 5(b), CGST Act, 2017 — The following shall be treated as supply of services: construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.