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2024 (3) TMI 256 - AAR - GSTRate of tax - Whether the rate mentioned Notification No. 3 of 2019 in Clause(ii) a(i) for affordable residential apartments and rate mentioned in Clause (iii) (a) (ia) for other than affordable residential apartments can be effectively levied in a single project/ building that is being developed as Residential Real Estate Project? - HELD THAT - On a plain reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, it is evident that the rate of GST prescribed under the entry at Item (i) applies to construction of affordable residential apartments and under the entry at Item (ia) applies to construction of residential apartments other than affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer except where the entire consideration is received after issuance of completion certificate. On a conjoint reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; the definition of the terms apartment ; residential apartment ; affordable residential apartment ; 'Teal estate project ; residential real estate project and promoter , it is clear that the rate of tax prescribed in Item (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is in respect of construction services supplied for affordable and other than affordable residential apartments respectively in a residential real estate project. Therefore, the services of construction of affordable residential apartments and the services of construction of other than affordable residential apartments in a residential real estate project attract GST at the rate of 1.5% 0.75% - CGST 0.75% - SGST and 7.5% 3.75% - CGST 3.75% - SGST) respectively as per entries at Items (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries.
Issues Involved:
1. Applicability of GST rates for affordable and non-affordable residential apartments within a single residential real estate project. Summary: Issue 1: Applicability of GST Rates for Affordable and Non-Affordable Residential Apartments: The applicant, a leading builder in Kerala, sought an advance ruling on whether different GST rates can be applied to affordable and non-affordable residential apartments within a single residential real estate project as per Notification No. 3/2019. The applicant has been remitting GST at 1% for affordable housing projects and 5% for other residential projects and proposed a new project with both types of units. The Authority for Advance Ruling clarified that the provisions of the CGST Act and KSGST Act are similar, and the rates specified under Notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended by Notification No. 03/2019 CT (Rate) dated 29.03.2019, are applicable. Specifically, the GST rate for affordable residential apartments is 1.5% (0.75% CGST + 0.75% SGST) and for non-affordable residential apartments is 7.5% (3.75% CGST + 3.75% SGST). The Authority examined the definitions and conditions under the relevant notifications and concluded that the services of construction of affordable residential apartments and other than affordable residential apartments in a residential real estate project attract GST at the specified rates. Therefore, both rates can be effectively levied within a single project, adhering to the conditions prescribed under the respective entries. Ruling: The Authority ruled affirmatively, stating that the services of construction of affordable residential apartments and other than affordable residential apartments in a residential real estate project attract GST at the rates of 1.5% and 7.5% respectively, as per entries at Items (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
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