EXEMPTION FOR PURE LABOUR CONTRACTS REAL ESTATE

[Akash Aggarwal]

A contract given by developer for supply of pure labour contracts for construction of 100 different single residential units on different plot of land under a group housing scheme and with a single RERA Registration. Whether exemption of Entry no 11 of N. No 12/2017 can be availed?

[KUNAL DESAI]

Entry No. 11 of 12/2017-CT(R) reads as under

"Services by way of pure labor contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex."

whereas (zze) “single residential unit” means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family;

As per my opinion, there is single housing project having single RERA Registration wherein there are multiple single residential units which cannot be treated as self-contained residential unit and hence, exemption cannot be availed rather concessional rate of 12% may be available to the contractor.

AI Summary

Exemption for pure labour contracts restricted when units form part of a single housing project with single registration. Entry No. 11 exempts pure labour contracts for original works relating to a single residential unit, meaning a self-contained unit for one family, when constructed otherwise than as part of a residential complex. Multiple dwellings built within a single housing project under one registration are not treated as separate self-contained units for this exemption, and therefore the exemption cannot be availed; a concessional contractor rate may instead apply.