April 11, 2016 –
When the previous Guide on Property Developer dated 30 March 2015 (the Previous Guide) was issued, it was very much a total revamp of the earlier guide dated 11 March 2014. Exactly another one year later, this revised Guide dated 1 April 2016 with the amended title of GST Guide on Land and Property Development (the Revised Guide) is probably a partial revamp of the Previous Guide. So yes, the GST guide for property development industry has evolved a lot over the last two years. Each time, a number of rules were changed and a number of unclear areas were clarified. A few new issues arose as well. It is therefore important to identify all these changes and developments in order to better manage the GST issues of this industry.
The Revised Guide consists of 90 pages with 68 Q & A as compared to 64 pages with 53 Q & A in the Previous Guide. It includes additional topics or areas and provides more examples and Q & A to explain selected issues in this industry. Out of the 44 pages of the main content section(page 6 to page 49), about 20 pages were devoted to discuss the different category of land and building for GST treatment – whether Exempt, Standard-rated or Relief Supplies. Another 15 pages were used up to discuss the GST issue and treatment for Joint Development. The discussion on holding and disposal of properties was extended to cover disposal by company and individual joint owners in addition to disposal by individual.
This publication, the GST Quick Update – Special Issue, is intended to only highlight key changes from the Previous Guide on selected areas and issues and it is never meant to serve as a complete summary of the differences between this Revised Guide and the Previous Guide. Readers should always refer to the Revised Guide for the complete coverage of the rules and guidelines on GST for land and property development.
It should also be noted that all GST Guides issued by the Customs as well as the DG’s Decisions are not legally binding. In fact, in all the recently issued Guides, Customs have included a Disclaimer statement which, inter alia, states that ‘….the RMCD will not be responsible for any mistakes and inaccuracies….All information……… is subject to change when necessary.’
As such, if you disagree with what is stated in the Guide, you may take your own position if you could defend it based on the laws on hand. We would advise that you seek professional advice if you have any contentious issues that may have significant impact on the tax liability.