Works contract treatment denied concessional housing rate where individual houses were built on beneficiaries' land without sale in a project.

Construction of individual houses on identified beneficiaries' land, on a turnkey basis, did not satisfy the concessional entry for affordable residential apartments because that entry applies to a promoter's construction in a residential real estate project for sale to a buyer. The activity was therefore treated as a works contract involving construction of immovable property with transfer of goods in execution, and not as supply covered by Serial No. 3(i) of Notification No. 11/2017-Central Tax (Rate). The claimed exemption under Notification No. 12/2017-Central Tax (Rate) was also unavailable, so the supply was taxable as a works contract at the applicable rate.

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Issues: (i) Whether the construction of low-cost housing units for flood-affected individuals fell within Serial No. 3(i) of Notification No. 11/2017-Central Tax (Rate) as amended. (ii) Whether the services were exempt, in whole or in part, under Notification No. 12/2017-Central Tax (Rate) as amended.

Issue (i): Whether the construction of low-cost housing units for flood-affected individuals fell within Serial No. 3(i) of Notification No. 11/2017-Central Tax (Rate) as amended.

Analysis: The concessional entry for affordable residential apartments applies only to construction by a promoter in a residential real estate project intended for sale to a buyer. The project here involved construction of individual houses on the land of identified beneficiaries, on a turnkey basis, and did not involve sale of apartments in a residential real estate project. The activity therefore did not satisfy the conditions of Serial No. 3(i). The activity was instead a works contract involving construction of immovable property with transfer of goods in execution.

Conclusion: The activity did not fall under Serial No. 3(i) of Notification No. 11/2017-Central Tax (Rate) as amended.

Issue (ii): Whether the services were exempt, in whole or in part, under Notification No. 12/2017-Central Tax (Rate) as amended.

Analysis: The exemption notification did not cover the composite works contract supply involved here. The construction of 45 individual residential houses was treated as a taxable composite supply of works contract, and the specific exemption claimed was not available on the facts found.

Conclusion: The services were not exempt, in whole or in part, under Notification No. 12/2017-Central Tax (Rate) as amended.

Final Conclusion: The ruling held the construction activity to be taxable as a works contract at the applicable rate under Serial No. 3(v) of Notification No. 11/2017-Central Tax (Rate), and denied exemption under Notification No. 12/2017-Central Tax (Rate).

Ratio Decidendi: Construction of individual houses on beneficiaries' land, without sale of apartments in a residential real estate project, is not covered by the concessional entry for affordable residential apartments and is taxable as a works contract supply unless a specific exemption applies.

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