Works Contract to Trust

[VENU K]

A trust is constructing 100 independent houses to be given to people free of cost. The ownership of land as well as houses will remain with the trust. The allottees will be able to stay free of cost at the houses.

The trust has given the construction to a contractor .

In this connection will the contractor get any exemption ?

Can the contractor avail lower GST rates available for Affordable Housing Project ?

[Shilpi Jain]

Affordable housing has criteria of area to be fulfilled 90/60 sqm.

Additionally, presently there is no concessional rate of GST applicable for a contractor constructing affordable houses.

I am assuming these houses are part of a complex / common society / community. No exemption available

[Vijay kumar]

It is taxable for the contractor since consideration is there between contractor and trust. No exemption for contractor just because there is no consideration between the Trust and the allottees. Affordable housing project, not eligible for contractor in my view

AI Summary

GST on works contract taxable where contractor receives consideration from trust despite free occupancy by allottees. A contractor engaged by a trust to construct residential units that the trust will retain and allot free of charge is subject to GST because the contractor receives consideration from the trust; lack of consideration between the trust and allottees does not exempt the contractor, and contractors are not treated as eligible for affordable housing concessional rates where area criteria and scheme conditions are unmet.