Reduced GST on affordable housing works contract applies to eligible flats meeting carpet area and project conditions.

Construction services for an affordable housing project qualified for the concessional GST rate where the project was approved as residential affordable housing, more than 50% of the permissible FSI was used for dwelling units with carpet area not exceeding 60 sq. m., and the relevant notification covered composite works contract supplies for low-cost houses in an infrastructure-status affordable housing project. The clarification noted that the builder must assess whether the project meets the affordable housing definition and no separate certificate is required. The concession applied only to eligible flats and only to supplies made after 25-01-2018.

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Issues: Whether the construction services supplied under the project qualified for the reduced GST rate applicable to low-cost houses in an affordable housing project.

Analysis: The project was approved as a residential affordable housing scheme, and the material on record showed that more than 50% of the permissible FSI was used for dwelling units having carpet area not exceeding 60 sq. m. The relevant notification, as amended, extended the concessional rate to composite supply of works contract for low-cost houses up to 60 sq. m. in an affordable housing project that had been given infrastructure status. The clarification relied upon also indicated that the builder is to determine whether the project satisfies the definition of affordable housing, and no separate certificate from any authority is required. The concession was held applicable only to supplies made after 25-01-2018 and only to flats within the prescribed carpet area limit.

Conclusion: The project qualified for the reduced rate for eligible flats, and the question was answered in the affirmative in favour of the assessee.

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