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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 ..... ed Notification No. 3 of 2019 in Clause(ii) a(i) for affordable residential apartments and rate mentioned in Clause (iii) (a) (ia) for other than affordable residential apartments can be effectively levied in a single project/ building that is being developed as Residential Real Estate Project. 4. Contentions of the Applicant: 4.1. The applicant submits that they are involved in the construction and development of residential real estate projects. After the announcement of affordable housing schemes by the Government of India under PMAY, the applicant has also engaged in the construction and development of affordable housing segment. Currently they are offering 15 projects under the affordable housing segment and 19 projects as other than affordable housing scheme. After the new scheme on real estate sector as per Notification No. 3/2019 has been made effective, the applicant is remitting GST at 1% [effective rate] for affordable housing projects and 5% [effective rate] for other than affordable residential real estate projects. Now with a view to offer increased inventory of affordable residential apartments, the applicant is desirous of offering both affordable residential apar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity towards real estate sector is clearly specified in the rate notification No. 3/2019. The intention of the legislature is to allow a reduced rate of tax towards affordable housing. There is no restriction on the applicability of reduced tax rate to affordable housing units, when it is involved in a mixed real estate project. The applicant hence submitted the application for advance ruling for getting a clarification in this issue to avoid confusion and future litigation. They also request concurrence for the tax computation made herein for the proposed project, which is illustrated in their submission. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The Jurisdictional Officer reported that there are no pending or decided proceedings against the applicant under any provisions of the GST Act 2017. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 25.05.2023 through Virtual Mode. Shri. Lazar Dominic, Chartered Accountant represented the applicant. The applicant filed detailed statement of facts along with the application. He requested to is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) (ia) Construction of residential apartments other than affordable residential apartments by a promoter in an 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). 7.5. The rate of GST applicable for entry at Item (i) is 1.5% [0.75% - CGST + 0.75% - SGST] and for the entry at Item No. (ia) is 7.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment of tax on apartments supplied by the landowner-promoter in such project. 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 completion certificate or first occupation of the project, whichever is earlier) falls short of the said threshold of 80 per cent, central tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of nine percent on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice; and (b) amount charged for transfer of land or undivided share of land, as the case may be including by way of lease or sub-lease. 7.7. Para 4 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 provides the definition of the different terms used in the above entries. The relevant definitions are reproduced below; (xiv) the term -apartment shall have the same meaning as assigned to it in clause (e) of section 2 of the Real Estate (Regulation and Development) Act, 2016; (xv) the term - project shall mean a Real Estate Project or a Residential Real Estate Project; (xvi) the term -affordable residential apartment shall mean, - (a) a residential apartment in a project which commences on or after 1st April, 2019, or in an ongoing project in respect of which the promoter has 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 metropoli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n lands owned by them or placed at their disposal by the Government; or (b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or (iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its members or in respect of the allottees of such apartments or buildings; or (v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or (vi) such other person who constructs any building or apartment for sale to the general public. (zn) "real estate project" means the development of a building or a building consisting of apartments, or converting an existing building 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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