SINGLE RESIDENTIAL UNIT. RATE OF TAX

[Sadanand Bulbule]

Dear experts,

In terms of Notification No. 20/2017 dated 22/08/2017, the composite supply of works contract to a “single residential unit otherwise than as a part of a residential complex” qualifies for 12% GST (6% CGST + 6% SGST), subject to the following general understanding:

Meaning: “A single residential unit is a self-contained residential unit designed for use, wholly or principally, for residential purposes for one family.”

Not part of a residential complex:

What is crucial to decide—if the unit is part of a layout or building with common facilities like: Common areas common water or electricity supply, clubhouse, security services, then it is generally treated as part of a residential complex, and the rate of tax @12% is not applicable. This is my perception.

Experts to comment.

AI Summary

12% GST on Single Residential Units Applies Only If Not Part of Residential Complex Under Notification 20/2017 The discussion concerns the applicability of a 12% GST rate on works contracts for a single residential unit not part of a residential complex, as per Notification No. 20/2017. A single residential unit is defined as a self-contained unit intended for one family. The key issue is whether the unit is part of a residential complex, characterized by shared facilities such as common areas, utilities, or security services; if so, the concessional 12% GST rate does not apply. Recent rulings from authorities in Tamil Nadu and Kerala were cited, and it was noted that this concessional GST entry is no longer available. The original understanding was correct for the period when the entry was in force.