Ruling: Low-cost houses at real estate projects under 60 sq. mtrs. eligible for 12% GST

The ruling determined that dwelling units under 60 sq. mtrs. at a real estate project qualify as 'low cost houses' and are eligible for a concessional GST rate of 12%. Common amenities linked to these units also benefit from the 12% rate, except for specific charges. The project was classified as an 'ongoing project,' meeting the necessary criteria for the concessional rate. Units exceeding 60 sq. mtrs. are subject to the standard GST rate of 18%.

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Issues Involved:
1. Qualification of dwelling units as 'low cost houses' and eligibility for concessional GST rate of 12%.
2. Applicability of concessional rate to common amenities such as club house, swimming pool, etc.
3. Qualification of the project as an 'ongoing project' under Notification No. 3/2019.
4. Applicable GST rate on units not qualifying as 'low cost houses'.

Detailed Analysis:

Issue 1: Qualification of Dwelling Units as 'Low Cost Houses'
The applicant, a real estate developer, sought to determine if the dwelling units at Joyville, Virar qualify as 'low cost houses' under the GST regime, and thus eligible for a concessional rate of 12% GST. The project comprises multiple phases, with the majority of units having a carpet area of less than 60 sq. mtrs. The relevant Notification No. 11/2017-C.T. (Rate) dated 28.06.2017, amended by Notification No. 1/2018-C.T. (Rate) dated 25.01.2018, specifies a concessional rate for 'low cost houses' in an affordable housing project with infrastructure status. The project qualifies as such since more than 50% of the Floor Space Index (FSI) is utilized for units under 60 sq. mtrs. Thus, the units measuring less than 60 sq. mtrs. qualify as low cost houses and are eligible for the concessional rate of 12% GST.

Issue 2: Applicability of Concessional Rate to Common Amenities
The applicant contended that common amenities like club house, swimming pool, etc., should also benefit from the concessional rate as they are part of the composite supply of works contract services. The ruling agreed, stating that these amenities form part of the overall construction service and are naturally bundled with the principal supply of dwelling units. Therefore, the concessional rate of 12% applies to these common amenities for units under 60 sq. mtrs. However, charges like Advance Maintenance Charges collected for maintenance after possession and before society formation are not part of this composite supply and attract 18% GST.

Issue 3: Qualification as an 'Ongoing Project'
The applicant sought clarity on whether the project qualifies as an 'ongoing project' under Notification No. 3/2019-C.T. (Rate) dated 29.03.2019. The criteria include having a commencement certificate issued before 31.03.2019, no completion or occupation certificate issued, and units booked before 31.03.2019. The applicant's project met these conditions, and they had filed the required Annexure IV form. Hence, the project qualifies as an 'ongoing project' and is eligible for the concessional rate of 12% GST for units under 60 sq. mtrs.

Issue 4: Applicable GST Rate on Non-Qualifying Units
The applicant questioned the GST rate applicable to units exceeding 60 sq. mtrs. The ruling clarified that units not qualifying as 'low cost houses' (i.e., units with a carpet area greater than 60 sq. mtrs.) would be subject to the standard GST rate of 18%.

Conclusion:
- Issue 1: Dwelling units under 60 sq. mtrs. qualify as 'low cost houses' and are eligible for a concessional GST rate of 12%.
- Issue 2: Common amenities associated with units under 60 sq. mtrs. are eligible for the concessional rate of 12%, while certain charges like Advance Maintenance attract 18% GST.
- Issue 3: The project qualifies as an 'ongoing project' under Notification No. 3/2019, making it eligible for the concessional rate for units under 60 sq. mtrs.
- Issue 4: Units exceeding 60 sq. mtrs. are subject to an 18% GST rate.

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