Goods and Services Tax - Tamil Nadu Goods and Services Tax Act, 2017 - Construction Services - Services exempt from state tax - Amendments - Notification - Issued. - G.O. (Ms) No. 43 - Tamil Nadu SGST

COMMERCIAL TAXES AND REGISTRATION (BI) DEPARTMENT G.O. (Ms) No. 43 Dated: 29.3.2019 Panguni-15 Thiruvalluvar Aandu, 2050 NOTIFICATION In exercise of the powers conferred by sub-section (1) of section 11 of the Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017), the Governor of Tamil Nadu, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments to the Commercial Taxes and Registration Department Notification No. II(2)/CTR/532(d-15)/2017, published at pages 119 to 143 in Part II-Section 2 of the Tamil Nadu Government Gazette, Extraordinary, dated the 29 th June, 2017, namely:- AMENDMENTS In the said notification,- (i) in the opening paragraph, for the word, brackets and figures sub-section (1) of section 11 the word, brackets and figures ' sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and section 148, shall be substituted; (ii) in the Table, - (a) after serial number 41 and the entries relating thereto, the following serial numbers and entries shall be inserted, namely:- (1) (2) (3) (4) (5) 41A Heading 9972 Service by way of transfer of development rights (herein refer 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 ) Nil Provided that 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, as the case may be, in the following manner - [GST payable on TDR or FSI(including additional FSI) or both for construction of the residential apartments in the project but for the exemption contained herein]x (carpet area of the residential apartments in the project which remain un- booked on the date of issuance of completion certificate or first occupation Total carpet area of the residential apartments in the project) Provided further that tax payable in terms of the first proviso hereinabove shall not exceed 0.5 per cent of the value in case of affordable residential apartments and 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 The liability to pay state tax on the said portion of the development rights or FSI, or both, calculated as above, shall arise on the date of completion or first occupation of the project, as the case may be, whichever is earlier. 41B Heading 9972 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). Nil Provided that 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, as the case may be, in the following manner - [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 residential apartments in theproject but for the exemption contained herein]x(carpet area of the residential apartments in the project which remain un- booked on the date of issuance of completion certificate or first occupation Total carpet area of the residential apartments in the project); Provided further that the tax payable in terms of the first proviso shall not exceed 0.5 per cent. of the value in case of affordable residential apartments and 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. The liability to pay state tax on the said proportion of upfront amount (called as premium, salami, cost, price, development charges or by any other name) paid for long term lease of land, calculated as above, shall arise on the date of issue of completion certificate or first occupation of the project, as the case may be. (iii) after paragraph 1, the following paragraphs shall be inserted, namely, - 1A. Value of supply of service by way of transfer of development rights or FSI by a person to the promoter against consideration in the form of residential or commercial apartments shall be deemed to be equal to the value of similar apartments charged by the promoter from the independent buyers nearest to the date on which such development rights or FSI is transferred to the promoter. 1B. Value of portion of residential or commercial apartments remaining un-booked on the date of issuance of completion certificate or first occupation, as the case may be, shall be deemed to be equal to the value of similar apartments charged by the promoter nearest to the date of issuance of completion certificate or first occupation, as the case may be. (iv) in paragraph 3 relating to Explanation, after clause (iv), the following clause shall be inserted, namely: - (v) The term apartment shall have the same meaning as assigned to it in clause (e) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2017). (vi) The term affordable residential apartment shall have the same meaning as assigned to it in the Commercial Taxes and Registration Department Notification No.II(2)/CTR/532(d-14)/2017, published at pages 85 to 119 in Part II-Section 2 of the Tamil Nadu Government Gazette, Extraordinary, dated the June, 2017, as amended. (vii) The term promoter shall have the same meaning as assigned to it in clause (zk) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2017). (viii) The term project shall mean a Real Estate Project or a Residential Real Estate Project. (ix) the term Real Estate Project (REP) shall have the same meaning as assigned to it in clause (zn) under section 2 of the Real Estate (Regulation and Development) Act, 20 16 (Central Act 16 of 2017). (x) The term Residential Real Estate Project (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP; (xi) The term carpet area shall have the same meaning as assigned to it in clause (k) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2017). (xii) an apartment booked on the date of issuance of completion certificate or first occupation of the project shall mean an apartment which meets all the following three conditions, namely- (a) part of supply of construction of the apartment service has time of supply on or before the said date; and (b) consideration equal to at least one instalment has been credited to the bank account of the registered person on or before the said date; and (c) an allotment letter or sale agreement or any other similar document evidencing booking of the apartment has been issued on or before the said date. (xiii) floor space index (FSI) shall mean the ratio of a building's total floor area (gross floor area) to the size of the piece of land upon which it is built. . 2. This notification shall come into force with effect from the 1 st day of April, 2019. (Ka.BALACHANDRAN) PRINCIPAL SECRETARY TO GOVERNMENT