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TMI Blog2021 (10) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... new rate introduced w.e.f. 01.04.2019 is mutually exclusive. There is no scope to pay tax at both the rates on or after 01.04.2019. The definition of affordable residential apartment is not applicable in respect of the 06(six) projects involved in the instant case for the following reasons: (i) Affordable residential apartment shall mean a residential apartment in a project which commences on or after 1st April, 2019. But here all the projects are found to have been commenced before 1st April, 2019; (ii) Affordable residential apartment shall mean a residential apartment in an ongoing project in respect of which the promoter has not exercised option to pay tax at the rates as specified for item (ie) or (if) i.e., old GST rates. But in the instant case, the promoter has exercised option to pay central tax and state tax at the rate which was leviable prior to 01.04.2019. Where a promoter exercises option in Annexure-IV to pay tax at the rate as specified for item (ie) or (if) against serial number 3 of the Notification No. 3/2019 Central Tax (Rate) dated 29.03.2019, there is no scope to pay tax at a reduced rate of 1% or 5% (effective rate), as the case may. - Case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serial number 14 of the application in FORM GST ARA-01: Whether this new definition is applicable in respect of flats (having carpet area of 60 sqm and value up to ₹ 45 lacs) of ongoing projects and collect tax @ 8% on all advances received after 01.04.2019 where: (i) 1st booking money received after 01.04.2019; and (ii) 1st booking money received before 01.04.2019 1.6 The aforesaid question on which the advance ruling is sought for is found to be covered under clause (b) of sub-section (2) of section 97 of the GST Act. 1.7 The applicant states that the question raised in the Application has neither been decided by nor is pending before any authority under any provision of the GST Act. 1.8 The officer concerned from the Revenue has raised no objection to the admission of the Application. 1.9 The Application is, therefore, admitted. 2. Submission of the applicant 2.1 In course of personal hearing, the authorised representative of the applicant has submitted (i) a detailed written submission, (ii) photocopy of receipted documents in support of submission of Annexure-IV before the JCCT, Commercial Tax, Barrackpore Jurisdiction Office in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority. (b) where commencement certificate in respect of the project, is not required to be issued by the competent authority, it is certified by any of the authorities specified in subclause (a) above that construction of the project has started on or before the 31st March, 2019; (c) completion certificate has not been issued or first occupation of the project has not taken place on or before the 31st March, 2019; (d) apartments being constructed under the project have been, partly or wholly, booked on or before the 31st March, 2019. 2.6 The applicant argues that if any of the four conditions, as stated above, is not satisfied, the ongoing project will be treated as new project and the new definition of affordable housing will be applicable. 2.7 Thus the applicant is of the view that in respect of his projects where booking money is received after 01.04.2019, the new definition of affordable housing will be applicable. The applicant further submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partments. However, it became immaterial in case of projects started on or after 01-04-2019, whether the applicant exercised this onetime option before his jurisdictional officer to pay GST at the old rate for all projects started on or after 01-04-2019. Flats for which the applicant received first booking money after 01-04-2019, should not be treated as on-going projects and in such cases, applicant will have to pay GST @ 1% (without ITC on total consideration) on all the advances received for all affordable residential apartments, as per Notification No 03/2019 dated 29.03.2019 . 4. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the Revenue. 4.2 The issue involved in the instant case is to decide whether a promoter can pay tax at old GST of 12% (effective rate is 8%) on all advances received after 01.04.2019 in respect of apartments which qualifies the definition of affordable residential apartments as specified in Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l.No.3, item (i), in Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as amended by Notification No. 03/2019-Central Tax (Rate), dated 29-3-2019, the Central Tax Rate of 0.75% (effective tax rate being 0.5% without ITC) is applicable for the following: 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 April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay central 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) 4.5 The aforesaid entry thus prescribes that a promoter shall pay tax @1.5% w.e.f. 01.04.2019 (effective rate of 1% after allowing 1/3rd abatement for land) on intra-st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , (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 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. Explanation . -For the removal of doubt, it is hereby clarified that, supply by way of services specified at items (i), (ia), (ib), (ic), (id) and (ie) in column (3) shall attract central tax prescribed against them in column (4) subject to conditions specified against them in column (5) and shall not be levied at the rate as specified under this entry. (Provisions of paragraph 2 of this notification shall apply for valuation of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-06-2018 7 KEDAR BHABAN X X X NON-AFFORDABLE NOT RELEVANT TO OUR QUESTION 8 MAA SARADA BHABAN 01-02-19 753.29 753.029 AFFORDABLE 1St booking on 16-01-2019 9 SARJURAM NIBAS 13-08-18 800.55 457.26 AFFORDABLE 1St booking on 01-01-2019 10 ASHA PLAZA X X X CC OBTAINED BEFORE 01-04-2019 NOT RELEVANT TO OUR QUESTION 11 MANASHI APARTMENT X X X NON-AFFORDABLE NOT RELEVANT TO OUR QUESTION 4.8 It has been stated earlier that the authorised representative has submitted certificate of commencement in respect of 06(six) projects in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be affordable residential apartment since the applicant himself has cited the said definition in his written submission. In this context, we like to refer that Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India has issued FAQs under F. No. 354/32/2019-TRU dated 7-5-2019 for guidance and easy understanding of all stakeholders in the real estate sector pursuant to changes made vide Notification No. 3/2019-Central Tax (Rate) dated 29.03.2019. Question Nos. 2 and 4 of the said FAQ's and the answer given is reproduced below: Question No. 2: What is an affordable residential apartment? Answer: Affordable residential apartment is a residential apartment in a project which commences on or after 01-04-2019, or in an ongoing project in respect of which the promoter has opted for new rate of 1% (effective from 01-04-2019) having carpet area up to 60 square meter in metropolitan cities and 90 square meter in cities or towns other than metropolitan cities and the gross amount charged for which, by the builder is not more than forty-five lakhs rupees. [Cities or towns in the notification shall include all areas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to pay central tax and state tax at the rate which was leviable prior to 01.04.2019. 4.14 We also find that the advance ruling pronounced by the Maharashtra Authority for Advance Ruling in the case of Prajapati Developers as relied upon by the applicant has no applicability in respect of the instant case since the ruling was pronounced prior to issuance of Notification No. 3/2019 Central Tax (Rate) dated 29.03.2019 and therefore the definition of affordable housing apartment and levy of tax at a new rate was not a matter of issue in the said case. In view of the above discussions, we rule as under: RULING The definition of affordable residential apartment is not applicable in respect of flats 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, in an ongoing project in respect of which the promoter has exercised option to pay tax at old GST rates. Where a promoter exercises option in Annexure-IV to pay tax at the rate as specified for item (ie) or (if) against serial number 3 of the No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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