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TMI Blog2020 (6) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... and Part-B. Part-A is further divided into two phases i.e. Phase-1 and Phase-2. The projects under Phase-1 are (i) Sarvaswa-1 (ii) Sanatan-1 (iii) Sanatan-2 (iv) Stuti-1 (v) Stuti-2 (vi) Swaroop-1 (vii) Swaroop-2 (viii) Swaroop-3 and (ix) Swaroop-4. The projects under Phase-2 are : (i) Sanatan-3 (ii) Swaroop-5 and (iii) Swaroop-7 The projects under Part-B are: (i) Sarvasva-2 (ii) Stuti-3 and (iii) Swaroop-6 which are mainly for small and affordable houses; that it can be seen that 74.08% of the total Floor Space Index (FSI) is used for small houses having carpet area upto 60 sq. metres which can be understood better by seeing the table below: Project No.of units Total FSI Avg. FSI per unit sq. Mt. % of total FSI Carpet Area upto 60 sq. Mt. Per unit Sarvasva-2 338 10820.99 32.01 30.88% Stuti-3 286 15140.34 52.94 43.20% Total 25961.33 74.08% Carpet Area higher than 60 Sq.Mt. per Unit Swaroop-6 104 9085.41 87.36 25.92% Total 728 35046.74 48.14 100% 2. The applicant have further submitted that with effect from 25.01.2018, Notification No.01/2018-Central Tax(Rate), dated 25.01.2018 has insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The applicant has submitted his view point and submissions on issues on which the advance ruling is sought which is as under: (1) Benefit of reduced rate of tax is provided under sub-clause (da) to clause (v) of entry no.3 of Notification No.11/2017-Central Tax(Rate) based on the condition that an affordable housing project has been given an infrastructure status as provided under the Notification of the Government of India, in Ministry of Finance, Department of Economic Affairs vide F.No.13/6/2009-INF, dated 30.03.2017 and as per the said notification, a housing project using 50% or more of the FAR/FSI for dwelling units with carpet area upto 60 square metres has been given infrastructure status. (2) As the applicant is developing a township, which is a continuous process and not limited to one or two phases of development, entire area of a township cannot be considered for arriving at 50% or more FSI as required under the Notification dated 30.03.2017,; that a project is complete project in itself which is independent of other projects (within township) which are either completed before, during or after completion of Part B of Sector 4; that as township is a continuous deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable should be 12% (6% CGST + 6% SGST) and where further deduction of 1/3rd of total amount charged towards value of land is allowable, effective total tax rate of 8% on total amount charged including cost of land will be applicable for low cost housing as stated in above entry. 6. The applicant has put the following question for advance ruling in their application:- "Whether, under given facts and circumstances, is benefit of reduced rate as provided under Entry Number 3(v)(da) of the Notification No.11/2017-Central Tax (Rate) as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018, available to the applicant for houses constructed with a carpet area of 60 square metres per house?" DISCUSSION & FINDINGS 7. We have considered the submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing. During the personal hearing held on 19.03.2020, Shri Punit Prajapati and Shri Vishal Sayani appeared on behalf of the applicant. During the course of hearing, they stated that there are three phases in the project out of which the applicant has applied for ruling in respect of Part-B of Sector-4 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009INF, dated the 30th March,2017.(Affordable housing has been defined as a housing project using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 sq.meters). 10.1 As regards condition mentioned above, we need to define the terms - housing project, affordable housing and carpet area. (a) Definition of a 'housing project' is not available under the CGST Act, 2017 or in the notification dated 30.03.2017 of the Department of Economic affairs, hence it would have to be construed in generic terms. A 'housing project' would mean the construction/development of a building or buildings consisting of apartments, development of land into flats or apartments and selling of the same for a consideration consisting of stair cases, lifts, common basements, terraces, parks, play areas, common water tanks an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developing a township, which is a continuous process and not limited to one or two phases of development; that entire area of a township cannot be considered for arriving at 50% or more FSI as required under the Notification dated 30.03.2017,; that a project is complete project in itself which is independent of other projects (within township) which are either completed before, during or after completion of Part B of Sector 4; that as township is a continuous development process, it is not having any fixed total area under development and hence it could not have a fixed FSI as required under the notification dated 30.03.2017; that a township is different from a standalone housing project which is undertaken for a particular class of people and shall comprise of houses for all sections of the society; that a township is an integration of various projects for different types of people of society i.e. higher, middle and weaker class of people; thus, Part-B is independent project for affordable housing and total FSI of Part-B should be considered as denominator to arrive at 50% as required under notification dated 30.03.2017. In this regard, it is to mention that the repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le housing project and the units in the building being sold as part of this housing project. The applicant himself has been selling the entire project as one and giving undivided share to all buyers irrespective of whether unit is sold in Part-A or Part-B of the project. Therefore, the buyer of unit in Part-A of the project is equitable owner of common areas, common entrance, common facilities and common land as is the buyer of unit in Part-B. Therefore, the submissions of the applicants are self contradictory in itself since on one hand the applicant has been obtaining various permissions from authorities for entire project comprehensively and even selling the units as part of one project with common facilities and undivided share of land in entire project yet on the other hand claiming a part of the housing project as separable project in order to obtain the exemption. It is seen from the submission made by the applicant that 74.08% of the FSI of Part-B of the township of Sector-4 has been used for constructing units with a carpet area of upto 60 sq meters. However, since Part-B is not an independent/standalone housing project as discussed above, total FSI of Part-B cannot be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhinagar Urban Development Authority and that the entire Sector-4 (of Amba township) is having a common entrance, common facilities, common land etc. which includes Part-A (Phase-I and II) and Part-B. They also stated that all units are being sold in entire project with common undivided share of land establishing that owner of units in Part-A and Part-B have common ownership of undivided share of land. Under the circumstances, it would not be possible to consider Part-B of Sector-4 (of Amba township) as a standalone housing project. It is also seen from the submission made by the applicant that 74.08% of the FSI of Part-B of the township of Sector-4 has been used for constructing units with a carpet area of upto 60 sq meters which cannot be denied. However, since Part-B of Sector-4 of township cannot be considered as a standalone housing project and since 50% of FAR/FSI of the entire housing project of Sector-4 (of Amba township) which comprises of Part-A and Part-B has not been used for construction of dwelling units with carpet area of not more than 60 sq.meters (as per the requirement in Notification No.13/06/2009 dated 30.03.2017 of the Government of India, Ministry of Finance, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with carpet area of not more than 60 sq.meters (as per the requirement in Notification No.13/06/2009 dated 30.03.2017 of the Government of India, Ministry of Finance, Department of Economic Affairs), the said housing project cannot be considered as an 'affordable housing project'. The applicant, therefore, does not fulfil the conditions as envisaged in Entry No.3(v)(da) of Notification No:11/2017-Central Tax(Rate) dated 28.06.2017 (as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018), hence the benefit of the said notification is not applicable to them. 10.3 In view of the above discussions, it can be concluded that the applicant has not fulfilled the condition mentioned at Para-10 above and therefore the benefit of Entry No.3(v)(da) of Notification No:11/2017-Central Tax(Rate) dated 28.06.2017 (as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018)is not applicable to them. 11. In view of the foregoing, we rule as under - R U L I N G The applicant M/s. Amba township pvt.ltd. is not eligible for the benefit of reduced rate as provided under Entry Number 3(v)(da) of the Notification No.11/2017-Central Tax (Rate) as amended by Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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