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TMI BlogAmendments in the Government Notification of the Finance Department No.MGST-1017/C.R. 103(10)/Taxation-1 [Notification No.11/2017-State Tax (Rate), dated the 29th June 2017.X X X X Extracts X X X X X X X X Extracts X X X X ..... 17-State Tax (Rate), dated the 29th June 2017, published in the Maharashtra Government Gazette, Part IV-B, Extra-ordinary No. 182, dated the 29th June 2017, namely :- In the said notification,- (i) in the opening paragraph, (a) after the word, brackets and figures conferred by sub-section (1), , the word, brackets and figures sub-section (3) and sub-section (4) shall respectively be inserted; (b) the word and after the words and figures sub-section (5) of section 15 shall be substituted by the symbol , ; (c) after the word, brackets and figures section (16) , the words and figure and section 148 shall be inserted; (ii) in the Table,- (a) against serial number 3, for item (i), and the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted, namely,- Table (3) (4) (5) (i) Construction of affordable residential apartments by a promoter in a Residential Real Estate Project (herein after referred to as RREP) which commences on or after 1st Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) developer- promoter is a promoter who constructs or converts a building into apartments or develops a plot for sale, (ii) landowner- promoter is a promoter who transfers the land or development rights or FSI to a developer- promoter for construction of apartments and receives constructed apartments against such transferred rights and sells such apartments to his buyers independently. Provided also that eighty percent of value of input and input services, [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only; Provided also that inputs and input services on which tax is paid on reverse charge basis shall be deemed to have been purchased from registered person; Provided also that where value of input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (Provisions of paragraph 2 of this notification shall apply for valuaton of this service) 3.75 (ib) Construction of commercial apartments (shops, offices, godowns etc.) by a promoter in an RREP which commences on or after 1 st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein, 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. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) 3.75 (ic) Construction of affordable residential apartments by a promoter in a Real Estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, by the 10th of May, 2019; Provided also that where the option is not exercised in Form at Annexure IV by the 10th of May, 2019, option to pay tax at the rates as applicable to item (i) or (ia) or (ib) or (ic) or (id) above, as the case may be, shall be deemed to have been exercised; Provided also that invoices for supply of the service can be issued during the period from 1st April 2019 to 10th May 2019 before exercising the option, but such invoices shall be in accordance with the option to be exercised.; (if) Construction of a complex, building, civil structure or a part thereof, including,- (i) commercial apartments (shops, offices, godowns etc.) by a promoter in a REP other than RREP, (ii) residential apartments in an ongoing project, other than affordable residential apartments, in respect of which the promoter has exercised option to pay State tax on construction of apartments at the rates as specified for this item in the manner prescribed herein, but excluding supply by way of services specified at items (i), (ia), (ib), (ic), (id) and (ie) above intended for sale to a buyer, wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential apartments as specified in the entry in column (3) relating to this item, is not less than 50 per cent. of the total carpet area of all the apartments in the project : Provided also that for the purpose of determining whether the apartments at the time of supply of the service are affordable residential apartments covered by sub-clause (a) of clause (xvi of paragraph 4 below or not, value of the apartments shall be the value of similar apartments booked nearest to the date of signing of the contract for supply of the service specified in the entry in column (3) relating to this item : Provided also that in case it finally turns out that the carpet area of the affordable residential apartments booked or sold before or after completion, for which gross amount actually charged was forty-five lakhs rupees or less and the actual carpet area was within the limits prescribed in sub-clause (a) of clause (xvi) of paragraph 4 below, was less than 50 per cent. of the total carpet area of all the apartments in the project, the recipient of the service, that is, the promoter shall be liable to pay such amount of tax on reverse charge basis as is equal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharashtra, Part IVB, Extraordinary No. 108, dated 30th March, 2019. Explanation .- This entry is to be taken to apply to all services which satisfy the conditions prescribed herein, even though they may be covered by a more specific chapter, section or heading elsewhere in this notification. 9 - ; (iii) in paragraph 2,- (a) for the words, brackets, letters and figures sub-item (b), sub-item (c), sub-item (d), sub-item (da) and sub-item (db) of item (iv); sub-item (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of item (vi), the word, brackets, letters and figures (i) (ia), (ib), (ic), (id), (ie) and (if) shall be substituted; (b) in the Explanation, after the words this paragraph the words and paragraph 2A below shall be inserted; (iv) after paragraph 2, the following paragraph shall be inserted, namely,- 2A. Where a registered person transfers development right or FSI (including additional FSI) to a promoter against consideration, wholly or partly, in the form of construction of apartments, the value of constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard; (ii) Gross amount shall be the sum total of ;- A. Consideration charged for the services specified at item (i) and (ic) in column (3) against sl. No. 3 in the Table; B. Amount charged for the transfer of land or undivided share of land, as the case may be including by way of lease or sub lease; and C. Any other amount charged by the promoter from the buyer of the apartment including preferential location charges, development charges, parking charges, common facility charges etc.; (b) an apartment being constructed in an ongoing project under any of the schemes specified in sub-item (b), sub-item (c), sub-item (d), sub-item (da) and sub-item (db) of item (iv); sub-item (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of item (vi), against serial number 3 of the Table above, in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be. (xvii) the term promoter shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sanctioned plan; (xxii) development works means the external development works and internal development works on immovable property; (xxiii) external development works includes roads and road systems landscaping, water supply, seweage and drainage systems, electricity supply transformer, sub-station, solid waste management and disposal or any other work which may have to be executed in the periphery of, or outside, a project for its benefit, as may be provided under the local laws; (xxiv) internal development works means roads, footpaths, water supply, sewers, drains, parks, tree planting, street lighting, provision for community buildings and for treatment and disposal of sewage and sullage water, solid waste management and disposal, water conservation, energy management, fire protection and fire safety requirements, social infrastructure such as educational health and other public amenities or any other work in a project for its benefit, as per sanctioned plans; (xxv) the term competent authority as mentioned in definition of commencement certificate and residential apartment , means the local authority or any authority created o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all projects which commence on or after 1st April, 2019 or ongoing projects in respect of which the promoter has not exercised option to pay State tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, in the prescribed manner, before the due date for furnishing of the return for the month of September following the end of financial year 2018-19, in the following manner: 1. Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock (a) Input tax credit on inputs and input services attributable to construction of residential portion in a REP, which has time of supply on or after 1st April, 2019, may be denoted as Tx. Tx shall be calculated as under: Tx=T-Te Where, (i) T is the total ITC availed (utilized or not) on inputs and input services used in construction of the REP from 1st July, 2017 to 31st March, 2019 including transitional credit taken on 1st July, 2017; (ii) Te is the eligible ITC attributable to (a) construction of commercial portion and (b) construction of residential portion, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Architects Act, 1972 (20 of 1972) or a chartered engineer registered with the Institution of Engineers (India). (c) A registered person shall have the option to calculate 'Te' in the manner prescribed below instead of the manner prescribed in (b) above,- Te shall be calculated as under: Te = Tc + T1 + Tr Where, - Tc is the ITC attributable to construction of commercial portion in the REP, calculated as under: Tc =T3 * (carpet area of commercial apartments in the REP/ total carpet area of commercial and residential apartments in the REP); Wherein T3 = T- (T1 + T2) T1 = ITC attributable exclusively to construction of commercial portion in the REP T2 = ITC attributable exclusively to construction of residential portion in the REP and Tr is the ITC attributable to construction of residential portion in the REP which has time of supply on or before 31.03.2019 and which shall be calculated as under, Tr= (T3 + T2)* F1 * F2 * F3* F4 or Tr= (T- T1)* F1 * F2 * F3* F4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as on 31st March, 2019 is zero but invoicing has been done having time of supply before 31st March, 2019, and no input services or inputs have been received as on 31st March, 2019, Te shall be calculated as follows: (a) Input tax credit on inputs and input services attributable to construction of residential portion in a REP, which has time of supply on or before 31st March, 2019 may be denoted as Te which shall be calculated as under, Te = Tc + Tr Where, - Tc is the ITC attributable to construction of commercial portion in the REP, calculated as under: Tc =Tn* (carpet area of commercial apartments in the REP/ total carpet area of commercial and residential apartments in the REP) and Tr is the ITC attributable to construction of residential portion in the REP which has time of supply on or before 31st March, 2019 and which shall be calculated as under, Tr = Tn* F1 * F2 * F3 Where, - Tn= Tax paid on such inputs and input services on which ITC is available under the MGST Act,received in 2019-20 for construction of REP F1, F2 and F3 shall be the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100 units 2 No. of residential apartments in the project 7S units 3 Caroet area of the residential apartment 70 sqrn 4 Total carpet area of the residential apartments C2 * C3 5250 sqrn 5 value of each residential apartment 0.60 crore 6 Total value of the residential apartments C2 * CS 45.50 crore 7 No. of commercial apartments in the project 25 units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 Tc= T x (car pet a rea of commercial apartments in the REP/ total carpet area of commercial and residential apartments in the REP) C19 * (C9/ C10) 0.1 25 crore 21 Tr= T x F1 x F2 x F3 x F4 22 F1 C4 / C10 0.875 23 F2 C13 I C4 0.533 24 F3 C16 I C14 0.200 25 F4 1/ C11 5 26 Tr= T x F1 x F2 x F3 x F4 C19*C22*C23*C24*C25 0 .467 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 8 Carpet area of the commercial apartment 30 sqm 9 Total carpet area of the commercial apartments C7 * C8 750 sqm 10 Total carpet area of the project (Resi + Com) C4 + C9 6000 sqm 11 Percentage completion (Pc) as on 31.03.2019 [as declared to RERA or determined by chertered engineer] 20% 12 No of residential apartments booked before transition 40 units 13 Total carpet area of the residential apartments booked before transition C12 * C3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * C24 * C25 1.400 crore 27 Eligible ITC (Te)=Tc + Tr C26 + C20 1.525 crore 28 ITC to be reversed/ taken on transition, Tx= T- Te C19 - C27 -0.525 crore 29 Tx after application of cap on % invoicing vis-a-vis Pc 30 % completion 20% 31 % invoicing 60% 32 % invoicing after application of cap(Pc + 25%) C11+25% 45% 33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tr= T x F1 x F2 x F3 x F4 (after application of both the caps) C19 * C22 * C23 * C43 * C25 0.97 45 Eligible ITC (Te)=Tc + Tr (after application of both the caps) C20 + C44 1.10 46 ITC to be reversed / taken on transition, Tx= T- Te (after application of both the caps) C19 - C45 -0.10 crore * Note:- 1.The value of T at C19 has been estimated for illustration based on weighted average tax on inputs. 2. In actual practice, the registered person shall take 'aggregate of ITC taken as declared in GSTR-3B of tax periods from 1.7.2017 or commencemnt of project which is later and transitional credit taken under section 140 of CGST Act' as value of T. Annexure II Residential Real estate project (RREP) Input tax credit attributable to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artments) 1 F4= -------------------------------------------------- % Completion of construction as on 31st March, 2019 Illustration : where one-fifth (twenty percent) of the construction has been completed, F4 shall be 100 20 = 5. Explanation : % Completion of construction as on 31st March, 2019 shall be the same as declared to the Real Estate Regulatory Authority in terms of section 4 and section 11 of Real Estate (Regulation and Development) Act, 2016 and where the same is not required to be declared to the Real Estate Regulatory Authority, it shall be got determined and certified by an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972) or a chartered engineer registered with the Institution of Engineers (India). (c) The amounts 'Tx' and 'Te' shall be computed separately for input tax credit of Central tax, State tax, Union territory tax and integrated tax. (d) Where, Tx is positive, i.e.Te T, the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tn= Tax paid on such inputs and input services on which ITCis available under the CGST Act, received in 2019-20 for construction of residential and commercial apartments in the RREP. F1, F2 and F3 shall be the same as in para 1 above (b) The registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential or commercial portion in the RREP, for which he shall not otherwise be eligible, to the extent of the amount of Te. (c) The amount 'Te' shall be computed separately for input tax credit of Central tax, State tax, Union territory tax and integrated tax . 3. Notwithstanding anything contained in paragraph 1 or paragraph 2 above, Te shall be determined in the following situations as under: (i) where percentage invoicing is more than the percentage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 per cent. points; the value of percentage invoicing shall be deemed to be percentage completion plus 25 per cent. points; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to RERA or determined by chartered engineer] 20% 7 No of apartments booked before transition 80 units 8 Total carpet area of the residential apartment booked before transition C3 * C7 5600 sqm 9 Value of booked residential apartments C5 * C7 48 crore 10 Percentage invoicing of booked residential apartments on or before 31.03.2019 20% 11 Total value of supply of residential apartments having t.o.s. prior to transition C9 * C10 9.6 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. of residential apartments in the project 100 units 3 Carpet area of the residential apartment 70 sqm 4 Total carpet area of the residential apartments C2 * C3 7000 sqm 5 value of each residential apartment 0.60 crore 6 Percentage completion as on 31.03.2019 [as declared to RERA or determined by chertered engineer] 20% 7 No of apartments booked before transition 80 units 8 Total carpet area of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 % completion 20% 23 % invoicing 60% 24 % invoicing after application of cap(Pc + 25%) C6 + 25 % 45% 25 Total value of supply of residential apartments having t.o.s. prior to transition C9 * C24 21.60 crore 26 F3 after application of cap C25/C9 0.45 27 Te= T x F1 x F2 x F3 x F4 (after application of cap) C14 * C15 * C16 * C26 * C18 1.80 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act' as value of T. Annexure III Illustration 1: A promoter has procured following goods and services [other than capital goods and services by way of grant of development rights, long term lease of land or FSI] for construction of a residential real estate project during a financial year. Sl. No. Name of input goods and services Percentage of input goods and services received during the financial year Whether inputs received from registered supplier? (Y / N) 1 Sand 10 Y 2 Cement 15 N 3 Steel 20 Y 4 Bricks 15 Y 5 Flooring tiles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Paints 5 N 7 Architect/ designing/ CAD drawing etc. 10 Y 8 Aluminium windows, Ply, commercial wood 15 N In this example, the promoter has procured 80 per cent. of goods and services including cement from a GST registered person. However, he has procured paints, aluminum windows, ply and commercial wood etc. from an unregistered supplier. Hence at the end of financial year, the promoter is not required to pay GST on inputs on reverse charge basis. Illustration 3: A promoter has procured following goods and services [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], for construction of a residential rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st serial number 3 in the Table in this notification, as the case may be, by the 10th of May, 2019) Reference No. ___________________ Date ______________ To ____________________ ____________________ ____________________ (To be addressed to the jurisdictional Commissioner) 1. GSTIN: 2. RERA registration Number of the Project: 3. Name of the project, if any: 4. The location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the longitude and latitude of the end points of the project: 5. The number, type and the carpet area of apartments for booking or sale in the project: 6. Date of receipt of commencement certificate: Declaration 1. I hereby exercise the option to pay tax on construction of apartments in the above mentioned project as under : I shall pay tax on construction of the apartments: [Put ( ) mark in appropriate box] At the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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