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2019 (11) TMI 1567 - AAR - GSTRate of tax - Development of commercial properties and had launched an Affordable Housing Project on 01.12.2015 under the scheme approved by the Government of Haryana - whether the applicant taxpayer is to pay tax @ 6% 6% (after availing land abatement 4% 4%) availing the input tax as provided under notification 11 17 of 2017 under CGST Act notification 46 74 of 2017 under HGST Act? - the applicant taxpayer is to pay tax @ 0.5% 0.5% as provided under notification 3 4 of 2019 under CGST Act notification 45 46 of 2019 under HGST Act? HELD THAT - On the basis of above self-declaration by the company, all the events i.e. Sanction of building plans, declaration of likely date of start of construction registration under Haryana Real Estate Regulation Authority etc. occurred after 31/03/2019. Further, the company had not got the Environment Clearance certificate till the date of grant of RERA certificate, which has to be obtained, before start of construction activities of the project. As a confirmation of non-start of Construction activities, the company has declared that they had not incurred any expenditure on the project. This fact is clear from the declaration of the applicant before the RERA that expenditure incurred till the date of declaration was NIL. In view of the above facts, it is clear that a separate license bearing No.82 of 2018 dated 06.12.2018 and RERA License No. GGM/339/339/71/2019/33 dated 27.05.2019 for construction of residential apartments over the land measuring 4.36875 Acres had been obtained by the Applicant on which construction commenced only after 01.04.2019. So, this project being developed by the company does not fall under the definition of ongoing project . Rather this project falls under the category of a project other than an ongoing project as provided in the notification no. 03/2019 - Central Tax (Rate) and the rate of tax applicable on flats over the land measuring 4.36875 Acre is applicable @ 0.5% 0.5%(Without Input Tax) - While obtaining license from the RERA, the applicant itself declared the likely date of starting the construction work on an land measuring 4.36875 Acre as 05.07.2019 . Moreover, the bookings of flats over an land measuring 4.36875 acres were made after 01.04.2019. So, it is clear that the construction over the land measuring 4.36875 was started after 1.04.2019. Since the construction of affordable residential apartments over the land measuring 4.36875 Acre with respect to separate License No.82 of 2018 dated 06.12.2018 and RERA License No. GGM/339/339/71/2019/33 dated 27.05.2019 commenced after 01.04.2019, so, this is not an ongoing project.
Issues Involved:
1. Determination of applicable GST rate for an ongoing project. 2. Determination of applicable GST rate for a project commencing after 01.04.2019. Issue-wise Detailed Analysis: 1. Determination of applicable GST rate for an ongoing project: The applicant, M/S Nani Resorts and Floriculture Pvt. Ltd., launched an Affordable Housing Project on 01.12.2015 under the Affordable Housing Policy, 2013. The project was granted License No.11 of 2014 on 10.06.2014 by the Town and Country Planning Department, Haryana, for land measuring 5.00 acres in Village Dhankot, Sector 102, Gurugram. The building plan was approved on 26.03.2015, and construction began before 01.04.2019, with bookings made in the pre-GST period. According to Notification No. 03/2019 - Central Tax (Rate), an "ongoing project" is defined as a project that meets the following criteria: - Commencement certificate issued on or before 31st March 2019. - Construction started on or before 31st March 2019, certified by an architect, chartered engineer, or licensed surveyor. - Completion certificate not issued or first occupation not taken place on or before 31st March 2019. - Apartments booked partly or wholly on or before 31st March 2019. The project with License No.11 dated 10.06.2014 meets these criteria, qualifying it as an ongoing project. Therefore, the applicable GST rate is 12% (with Input Tax Credit + Land Abatement) as per Notification No.20/2017-Central Tax (Rate) dated 22.08.2017, since the applicant opted to pay GST at the old effective rate of 8% and 12% with ITC. 2. Determination of applicable GST rate for a project commencing after 01.04.2019: The applicant sought a separate license on 03.02.2018 for setting up an Affordable Group Housing Colony on land measuring 4.1125 acres. License No.82 of 2018 was granted on 06.12.2018, and the building plan was approved on 27.05.2019. The RERA license was issued on 27.05.2019 for constructing 595 flats in six towers. The project did not meet the criteria for an ongoing project as: - The building plans and RERA registration occurred after 31.03.2019. - The likely date of starting construction was declared as 05.07.2019. - No expenditure was incurred on the project till the date of RERA registration. - Environment clearance was applied for but not received by the date of RERA registration. As construction commenced after 01.04.2019, this project does not fall under the definition of an "ongoing project." Consequently, the applicable GST rate is 0.5% + 0.5% (without Input Tax Credit) as per Notification No. 03/2019 - Central Tax (Rate). Ruling: 1. For the project with License No.11 dated 10.06.2014 (ongoing project), the applicable GST rate is 12% (with Input Tax Credit + Land Abatement). 2. For the project with License No.82 of 2018 (not an ongoing project), the applicable GST rate is 0.5% + 0.5% (without Input Tax Credit). Ordered accordingly.
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