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TMI Blog2024 (3) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; the definition of the terms apartment ; residential apartment ; affordable residential apartment ; 'Teal estate project ; residential real estate project and promoter , it is clear that the rate of tax prescribed in Item (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is in respect of construction services supplied for affordable and other than affordable residential apartments respectively in a residential real estate project. Therefore, the services of construction of affordable residential apartments and the services of construction of other than affordable residential apartments in a residential real estate project attract GST at the rate of 1.5% [0.75% - CGST + 0.75% - SGST] and 7.5% [3.75% - CGST + 3.75% - SGST) respectively as per entries at Items (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries. - DR. S. L. SREEPARVATHY, IRS SHRI. K ABDUL LATHEEF, MEMBER Authorized Representative : Shri. Lazar Dominic, Chartered Accountant 1. M/s. Confident Projects Residential, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs rupees . The tax charged is at 0.75% CGST and 0.75% SGST with 1/3 abatement which brings the effective rate to 1% without input tax credit. All other apartments not fall under the above criteria are classified as other than affordable residential apartment and are charged at 3.75% CGST and 3.75% SGST with 1/3 abatement bringing the effective rate to 5%. 4.3. As per clause (ii)(a)(i) of the notification No. 3/2019 the effective rate of 1% for affordable apartments in residential real estate projects states that construction of affordable residential apartments by a promoter in a residential real estate project which commences on or after 1st April 2019 or in an ongoing residential real estate project 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 . The applicant submits that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and (ia) of entry at SI No. 3 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended by Notification No. 03/ 2019 CT (Rate) dated 29.03.2019 for the services of construction of affordable residential apartments and other than affordable residential apartments respectively in a Residential Real Estate Project is applicable for the construction services rendered in respect of affordable residential apartments and other than affordable residential apartments in a single project/ building that is being developed as Residential Real Estate Project. 7.2. The questions on which advance ruling is sought by the applicant falls within the purview of clause (b) of sub-section (2) of Section 97 of the CGST Act, 2017; i.e; applicability of a notification issued under the Act and hence admitted. 7.3. A new tax structure for real estate sector was introduced with effect from 01.04.2019 onwards by amendment of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 by Notification No. 03/2019 - Central Tax (Rate) dated 29.03.2019. The ruling is sought in respect of the services of construction of apartments that are being rendered by the applicant after 01.04.2019 and hence the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplying the service has not been taken except to the extent as prescribed in Annexure I in the case of REP other than RREP and in Annexure II in the case of RREP; Provided also that the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an amount equivalent to the input tax credit attributable to construction in a project, time of supply of which is on or after 1st April, 2019, which shall be calculated in the manner as prescribed in the Annexure I in the case of REP other than RREP and in Annexure II in the case of RREP; Provided also that where a registered person (landowner-promoter) who transfers development right or FSI (including additional FSI) to a promoter (developer- promoter) against consideration, wholly or partly, in the form of construction of apartments, - (i) the developer-promoter shall pay tax on supply of construction of apartments to the landowner-promoter, and (ii) such landowner-promoter shall be eligible for credit of taxes charged from him by the developer-promoter towards the supply of construction of apartments by developer-promoter to him, provided the land owner promoter further supplies such apartments to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is the person liable for paying the tax in relation to such supply of cement; Explanation. - 1. The promoter shall maintain project wise account of inward supplies from registered and unregistered supplier and calculate tax payments on the shortfall at the end of the financial year and shall submit the same in the prescribed form electronically on the common portal by end of the quarter following the financial year. The tax liability on the shortfall of inward supplies from unregistered person so determined shall be added to his output tax liability in the month not later than the month of June following the end of the financial year. 2. Notwithstanding anything contained in Explanation 1 above, tax on cement received from unregistered person shall be paid in the month in which cement is received. 3. Input Tax Credit not availed shall be reported every month by reporting the same as ineligible credit in the appropriate table in GSTR-3B. 7.6. Para 2 of the Notification 11/2017 Central Tax (Rate) dated 28.06.2017 as amended from time to time which is applicable for calculation of value of supply in relation to the services specified at Items (i) and (ia) of SI No. 3 of the said no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject (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. (xxix) Residential apartment shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority. 7.8. 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) apartment whether called block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit, tenement, unit or by any other name, means a separate and self-contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of land, used or intended to be used for any residential or commercial use such as residence, office, shop, showroom or godown or for carrying on any business, occupation, profession or trade, or for any other type of use ancillary to the purpose specified. (zk) promoter' means,- (i) a person who constructs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of residential apartments other than affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer except where the entire consideration is received after issuance of completion certificate. 7.10. On a conjoint reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; the definition of the terms apartment ; residential apartment ; affordable residential apartment ; 'Teal estate project ; residential real estate project and promoter as extracted above it is clear that the rate of tax prescribed in Item (i) and (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is in respect of construction services supplied for affordable and other than affordable residential apartments respectively in a residential real estate project. Therefore, the services of construction of affordable residential apartments and the services of construction of other than affordable residential apartments in a residential real estate project attract GST at the rate of 1.5% [0.75% - CGST + 0.75% - SGST] and 7.5% [3.75% - CGST + 3.75% - SGST) respectively as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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