Exemption in Construction Sector [ Entry No. 10,10A,11,41A ] - GST Ready Reckoner - GST

Exemption in Construction Sector Exemption Entry 10 Exemption has been provided against services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the In-situ rehabilitation of existing slum dwellers using land as a resource through private participation under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers a civil structure or any other original works pertaining to the Beneficiary-led individual house construction / enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana . Example M/s RML Enterprises provided labour services for construction of housing flats, under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana. It is exempt. Exemption Entry 10A Services supplied by Electricity Distribution Utilities by way of construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network upto the tube well of the farmer or agriculturalist for agricultural use is exempt. Exemption Entry 11 Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex is exempt Explanation Both these terms single residential unit and residential complex have been defined as follows: single residential unit means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family; residential complex means any complex comprising of a building or buildings, having more than one single residential unit. Thus, construction of any new single unit residential house would be exempt from Goods and Service tax. It is important that such house should qualify as original work. Also, the scope of single residential unit has been restricted to as one family. Example If Mr X gets his house constructed on a vacant land , such construction would qualify as Original work, however, if he gets modifications in a house done through Mr Y to suit his requirements , such construction would not qualify as Original works. Exemption Entry 41 A Service by way of transfer of development rights (TDR) or Floor Space Index (FSI) (including additional FSI) on or after 1st April, 2019 for construction of residential apartments by a promoter in a project, 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 . The amount of GST exemption available for construction of residential apartments in the project under this notification shall be calculated as under : [ GST payable on TDR or FSI (including additional FSI) or both for construction of the project ] x ( carpet area of the residential apartments in the project Total carpet area of the residential and commercial apartments in the project ) The promoter shall be liable to pay tax at the applicable rate, on reverse charge basis , on such proportion of value of development rights, or FSI (including additional FSI), or both, as is attributable to the residential apartments, which remain un-booked on the date of issuance of completion certificate, or first occupation of the project. Tax payable shall not exceed 0.5 per cent. of the value in case of affordable residential apartments and Tax payable 2.5 per cent. of the value in case of residential apartments on other than affordable residential apartments remaining un- booked on the date of issuance of completion certificate or first occupation of the project. Exemption Entry 41 B Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more, on or after 01.04.2019 , for construction of residential apartments by a promoter in a project, 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 . The amount of GST exemption available for construction of residential apartments in the project under this notification shall be calculated as under : [ GST payable on upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for long term lease of land for construction of the project ] x ( carpet area of the residential apartments in the project Total carpet area of the residential and commercial apartments in the project ) The promoter shall be liable to pay tax at the applicable rate, on reverse charge basis , on such proportion of upfront amount (called as premium, salami, cost, price, development charges or by any other name) paid for long term lease of land, as is attributable to the residential apartments, which remain un- booked on the date of issuance of completion certificate, or first occupation of the project, the tax payable shall not exceed 0.5 per cent. of the value in case of affordable residential apartments and The tax payable 2.5 per cent. of the value in case of residential apartments other than affordable residential apartments remaining un- booked on the date of issuance of completion certificate or first occupation of the project.