GST - Apartment Promoters

[Ethirajan Parthasarathy]

As per Notification No.3/2019 (Central Tax - Rate), new rate of GST has been prescribed. This applies to a 'promoters'. As per this notification, the meaning of promoter is the same as defined under RERA. Sec.2(zk) defines the term 'promoters'. As per the 'explanation' given at the end of the section, if the person who construct the apartment & the person who sells the apartment are different, both of them shall be deemed to be the promoters for the purpose of RERA.

This means a person who is acting as 'contractor' for the developers also become a promoter & is covered by notification no.3/2019. Hence, I feel even the 'contractor' has to charge 1% or 5% GST without ITC.

However, I find the said notification has entry (v) providing for 12% GST for pure 'contractor' who renders service to a promoters. There appears to be conflict of meaning.

Experts please give your comments

AI Summary

GST Implications for Apartment Promoters: Notification No. 3/2019 Aligns with RERA; Contractor Classification Disputed A query was raised regarding the Goods and Services Tax (GST) implications for apartment promoters as per Notification No. 3/2019, which aligns the definition of 'promoter' with the Real Estate Regulation Act (RERA). The notification suggests that both the constructor and seller of an apartment are deemed promoters, thus liable for GST. A potential conflict arises as the notification prescribes different GST rates for contractors. One response argued that contractors, who work on behalf of promoters, do not fall under the same category as promoters. Another response supported this view, referencing a ruling by the Authority for Advance Ruling.