TaxTMI 
TaxTMI 
2018 (9) TMI 236
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....reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- Statement of relevant facts having a bearing on the question(s) raised 1. M/s. Prajapati Developers, located at No.406-407 Persepolis Building, Sector -17, Vashi, Thane, Maharashtra, 400703 and registered under GST at Maharashtra vide registration number 27AAHFP6426G1Z4 (hereinafter referred to as the 'Applicant'). The Applicant is engaged in the business of construction of residential and commercial complex. 2. Presently the applicant is undertaking development of residential apartments under a project called 'Prajapati Magnum' in Dronagiri, Navi Mumbai. 3. The details of the project are as follows: a) Project Magnum was started in December 2013 and expected to complete in December 2022. b) The Project Magnum has five wings with 19 floors in each wing. c) Total number of f....
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....e rate of CGST as 6% in case of following service: "Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to - Low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/ 2009-INF, dated the 30th March, 2017" 5. The Maharashtra State Government also issued the similar notification under SGST law to reduce the SGST rate also to 6% on the above specified services in item (v) sub item (da) for the intra state supply. 6. Works Contract is defined in section 2(119) of the CGST Act, 2017 as "means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such....
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....oor Space Index (FSI) for dwelling units with carpet area@ of not more than 60 square meters. 14. Architect's Certificate on carpet area usage and also flat wise FSI issued for the given project is enclosed for your kind consideration, 15. Further, following statements made in the press release by the Ministry of Finance, Government of India on completion of 25th GST council meeting dated 18.01.2018 would be relevant: a) "The Fourth Recommendation of the Council is to extend the concessional rate of 12% to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. b) The recommendation of the Council would extend the concessional rate of 8% GST (after deducting value of land) to construction of flats/houses of less than 60 sqm in projects other than the projects covered by any scheme of the Central or State Government also. c) As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land) 16. From the above discussion, it is reasonably understood that ....
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....te of 8% GST is only applicable to low cost houses/ flats only, not to the project which includes other dwelling units as well. Project Prajapati Magnum is an ongoing project since December, 2013. It is obvious that many of the dwelling units would have been sold out to different categories of buyers viz. prospective buyers, promoters, investors and partners which may or may not include low income groups and economically weaker section. The key conditions to qualify for taking the benefits of the said Notification are: i) Low cost houses up to a carpet area of 60 square metre. ii) Housing project using at least 50% of the FAR/FSI for dwelling units with carpet area of not more than 60 square metre. Here, CGST Act 2017 does not define "low cost house". There are different definitions given by various agencies like RBI and MOHUPA, etc. Therefore, cost is the most important factor while deciding the benefits of said Notification. The second condition is being fulfilled here as the percentage of FSI used in the flats having carpet area below 60 sq.m is approximately 72.63% as per Area Certificate given by the Architect of Prajapati Developers on 15.3.2018. There are certain Appre....
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.... Kapil Prajapati, Asstt. Commr., Belapur, CGST & Central Excise, appeared and also made written submissions. 05. OBSERVATIONS We have gone through the facts of the case. The only issue that is before us is whether the construction services provided by the applicant under the project "Prajapati Magnum" qualifies for the reduced CGST rate of 6% as provided in Sr. No. 3 - item (v) - sub item (da) of Notification No. 01/2018-CT (Rate) dated 25.01.2018. This issue is with respect to the housing project called "Prajapati Magnum" in Dronagiri, Navi Mumbai which has been undertaken by them. The applicant has submitted that the said project was started in December 2013 and is expected to be completed in December 2022. They have also submitted that the total FSI consumed in the said project is 18,099.50 sq.mtrs out of which 13,145.26 sq mtrs. of FSI are consumed for flats having carpet area below 60 sq mtrs. They have, whilst submitting Architect's Certificate in support, submitted that their housing project is using around 73% of the total Floor Area Ratio (FAR)/ Floor Space Index and therefore their project falls under the definition of "Affordable Housing" as mentioned in notification ....
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....et area of 60 square metres per house in a housing project approved by the competent authority under- (1) the "Affordable Housing in Partnership" component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (2) any housing scheme of a State Government; (e).......................................; or (f)......................................... Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018 has made amendments to Sr, No, 3, column no. 3, item no. iv & v the above Notfn No 11/2017 as follows: In the said notification, (i) in the Table, - (a) against serial number 3, in column (3), - (A) in item (iv), - (I) for sub-item (c), the following sub-item shall be substituted, namely:- '(c) a civil structure or any other original works pertaining to the "'In-situ redevelopment of existing slums using land as a resource, under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);'; (II) after sub-item (d), the following sub-items shall be inserted, namely: - '(da) a civil structure or any other original works pertaining to the "Economically Weaker Section (EWS) houses" constructed under the Affordable Housin....
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....ide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th March, 2017 would attract a tax rate of 12%. This clause will be applicable to the applicant if the project undertaken by them is an affordable housing project which has been given infrastructure status vide Government of India notification mentioned above. Department of Economic Affairs' notification issued vide F. No. 13/6/2009-INF, dated the 30th March, 2017 has included Affordable Housing under the column "Infrastructure sub sector" against the category of Social and Commercial Infrastructure and has further defined "Affordable Housing" as a housing project using at least 50% of the Floor Area Ratio (FAR)/Floor Space Index (FSI) for dwelling units carpet area of not more than 60 square meters and "Carpet Area" shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016. The Notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th March,2017 is reproduced below:- With the approval of the Compete....
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.... than 60 square meters. @ "Carpet Area" shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016. One of the recommendations made by the GST Council in its 25th meeting held on 18th January 2018 at Delhi was to extend the concessional rate of 12% (8% CST after deducting value of land) to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The said notification of Department of Economic Affairs provides infrastructure status to Affordable Housing. The recommendation of the Council would extend the concessional rate to construction of flats/ houses of less than 60 sqm in projects other than the projects covered by any scheme of the Central or State Government also. The GST Council has also observed that "It may be recalled that all inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% after dedu....