GST Authority: Taxable Status of Works Contract Services for Affordable Housing Projects

The Authority ruled that the works contract services for constructing affordable residential apartments in the project were taxable under Entry No. 3(v)(da) of the Rate Notification. The project was deemed to qualify as an affordable housing project based on compliance with relevant regulations and definitions. The decision confirmed the taxability of the services, subject to specific conditions outlined in the GST Act.

---

---

Issues:
1. Admissibility of the application
2. Interpretation of Entry No. 3(v)(da) of Notification 11/2017 Central Tax (Rate)
3. Determination of affordable housing project status
4. Taxability of works contract service for construction

Admissibility of the application:
The applicant, a promoter of a residential real estate project, sought clarification on the applicability of Entry No. 3(v)(da) of the Rate Notification to works contract services received from contractors. The Authority found the question admissible under section 97(2)(b) of the GST Act, and the concerned revenue officer did not object to the application's admissibility, leading to its admission.

Interpretation of Entry No. 3(v)(da) of Notification 11/2017 Central Tax (Rate):
The applicant contended that their project qualified as an affordable housing project under the AHP Notification, making the works contract service taxable under Entry No. 3(v)(da) of the Rate Notification. The Authority examined definitions and criteria under the Rate Notification, emphasizing the importance of carpet area, completion certificates, and project booking status to determine tax applicability.

Determination of affordable housing project status:
Detailed observations were made regarding the project's registration, commencement, and completion certificates issued by competent authorities like WBHIRA and the local municipality. The Authority assessed the project's compliance with FAR/FSI requirements and the definition of affordable housing under the AHP Notification, concluding that the project qualified as an affordable housing project.

Taxability of works contract service for construction:
Based on the comprehensive analysis of the project's characteristics and compliance with relevant notifications, the Authority ruled that the works contract service for constructing dwelling units in the project classified as affordable residential apartments fell under Entry No. 3(v)(da) of the Rate Notification, subject to the applicant not opting for a different tax rate specified in the notification.

In conclusion, the ruling affirmed the taxability of works contract services for constructing affordable residential apartments in the project, subject to specific conditions and provisions under the GST Act.

---