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TMI Blog2020 (8) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... ial unit means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family - The rate of GST applicable as per the above entry is 12%. The activity of construction of 45 individual residential houses at different locations on the land belonging to the individual beneficiaries undertaken by the applicant as per the agreement dated 16.11.2019 is rightly classifiable as composite supply of works contract as defined in Section 2 (119) of the CGST Act, 2017 supplied by way of construction of single residential units otherwise than as a part of a residential complex and is liable to GST at the rate of 12% as per Sl No.3 (v) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended. - Advance Ruling No, KER/93/2020 - - - Dated:- 20-5-2020 - SHRI. SIVAPRASAD.S, IRS SHRI.B.S. THYAGARAJABABU, B.SC, LL.M MMBER Authorized Representative Mr. Mohankumar FCA 1. Habitat Technology Group (hereinafter referred to as the applicant ) is a nongovernmental organization in the shelter sector having sustainable building solutions and green and humane architecture. They are registered as a charitable societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes; if any. The project proposed to be implemented by the applicant for Sri Sathya Sai Trust is part of Rebuild Kerala Project and is with the sole intention of giving relief to the flood victims in the State. 4. It is contended by the applicant that the houses being constructed by them meet the definition of affordable housing as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended and accordingly the concessional rate of GST of 1.5% as per Sl No.3 (i) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is applicable for the services rendered by them. 5. The matter was examined in detail. As per the agreement dated 16.11.2019 entered by the applicant with Sri Sathya Sai Trust the applicant is awarded the work of construction of 45 residential units ad-measuring approximately equal to or less than 450 Square feet in different locations each along with residential facilities on the land belonging to the flood victims identified by the Trust. The applicant shall design the houses, obtain the statutory permits and construct the houses and hand them over on a turnkey basis. 6. The contention of the applicant is that the activity undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exercised option in the prescribed form to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty five lakhs rupees. (xvii) the term -promoter shall have the same meaning as assigned to it in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (xviii) the term -Real Estate Project (REP) shall have the same meaning as assigned to it in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016; (xix) 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. 10. The relevant clauses of Section 2 of the Real Estate (Regulation and Development) Act, 2016 which contains the definition of the terms; apartment ; promoter and real estate project are reproduced below; (e) ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a part thereof into apartments, or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto. 11. On a conjoint reading of the above provisions, it is evident that the activity undertaken by the applicant for Sri Sathya Sai Trust as per the agreement dated 16.11.2019 cannot by any stretch of imagination be construed as construction of affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer and hence the rate of GST prescribed under Sl No. 3 (i) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 03/2019 Central Tax (Rate) dated 29.03.2019 is not applicable in respect of the activity. The activity undertaken by the applicant is construction of 45 individual residential houses at different locations on the land belonging to the individual beneficiaries and the activity squarely falls within the scope of work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, wholly or principally, for residential purposes for one family. 13. The rate of GST applicable as per the above entry is 12% [6% CGST and 6% SGST] 14. Therefore, the activity of construction of 45 individual residential houses at different locations on the land belonging to the individual beneficiaries undertaken by the applicant as per the agreement dated 16.11.2019 is rightly classifiable as composite supply of works contract as defined in Section 2 (119) of the CGST Act, 2017 supplied by way of construction of single residential units otherwise than as a part of a residential complex and is liable to GST at the rate of 12% [6% CGST and 6% SGST] as per Sl No.3 (v) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended. 15. In view of the observations stated above, the following rulings are issued; i. Whether the services provided by the applicant to Sri Sathya Sai Trust for construction of low cost housing units for flood-affected individuals in Kerala fall within the ambit of Serial number (i), (v) or (va) of Notification No. 11/2017-CT(R) dated 28.06.2017 as amended by Notification No. 03/2019 - CT (R) dated 29.03.2019. The services pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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