TaxTMI 
TaxTMI 
Goods and Services Tax - Tamil Nadu Goods and Services Tax Act, 2017 - Construction services - Rate of state tax on services - Amendments - Notification - Issued.
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....Extraordinary issue of the Tamil Nadu Government Gazette, dated the 29th March, 2019. (BY ORDER OF THE GOVERNOR) To Ka.BALACHANDRAN PRINCIPAL SECRETARY TO GOVERNMENT The Additional Chief Secretary/Commissioner of State Tax, Chepauk, Chennai-5. The Works Manager, Government Central Press, Chennai-79. (with a request to publish the Notification in the Extraordinary issue of the Tamil Nadu Government Gazette, dated the 29th March, 2019 and to send 100 copies to the Government and 500 copies to the Additional Chief Secretary/Commissioner of State Tax, Chennai-5.) All Additional Commissioners/Joint Commissioners/Deputy Commissioners of State Tax concerned (Through the Additional Chief Secretary/Commissioner of State Tax, Chennai-5). Copy to: The Chief Minister's Office, Chennai - 9. All Secretaries to Government, Chennai - 9. (To communicate to all Heads of the Departments under their control) The Accountant General (Accounts and Entitlements), Chennai-18 (By name). The Accountant General (Audit-I) / (Audit-II), Tamil Nadu Lekha Pariksha Bhavan, 361, Anna Salai, Chennai-18. NIC, Chennai-9 (to host the G.O. on www.tn.gov.in). The Commercial Taxes and Registration....
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....d in column (4) shall be paid in cash, that is, by debiting the electronic cash ledger only; Provided also that credit of input tax charged on goods and services used in supplying the service has not been taken except to the extent as prescribed in Annexure I in the case of REP other than RREP and in Annexure II in the case of RREP; Provided also that the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an amount equivalent to the input tax credit attributable to construction in a project, time of supply of which is on or after (ia) Construction of residential apartments other than affordable residential apartments by a promoter in an RREP which commences on or after 1st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case 1st April, 2019, which shall be calculated in the manner as prescribed in the Annexure I in the case of REP other than RREP and in Annexure II in the case of RREP; who Provided also that where a registered person (landowner-promoter)....
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.... to his buyers before issuance of completion certificate or first occupation, whichever is earlier, and pays tax on the same which is not less than the amount of tax charged from him on construction of such the by developer- apartments promoter. Explanation. - (i) "developer-promoter" is a promoter who constructs or converts a building into apartments or develops a plot for sale, (ii) "landowner-promoter" is a promoter who transfers the land or development rights or FSI to a developer-promoter for construction of apartments and receives constructed apartments against such transferred rights and sells such to apartments independently. his buyers (Provisions of paragraph 2 of this notification shall apply for valuation of this service) (id) Construction of residential apartments other than affordable residential apartments by a promoter in a REP other than a RREP which commences on or after 1st April, 2019 or in an ongoing REP other than RREP in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed....
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.... (v); and sub-item (c) of item (vi), against serial number 3 of the Table, in respect of which the promoter has exercised option to pay state tax on construction of apartments at the rates as specified for this item. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) (if) Construction of a complex, building, civil structure or a part thereof, including,- (i) commercial apartments (shops, offices, godowns etc.) by a promoter in a REP other than RREP, (ii) residential apartments in an ongoing project, other than affordable residential apartments, in respect of which the promoter has exercised option to pay state tax on construction of apartments at the rates as specified for this item in the manner prescribed herein, 6 9 Explanation.- 1. The promoter shall maintain project wise account of inward supplies from registered and unregistered supplier and calculate tax payments on the shortfall at the end of the financial year and shall submit the same in the prescribed form electronically on the common portal by end of the quarter following the financial year. The tax liability on the shortfall of inward supplies from....
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....; c. in item (v) in column (3), - (1) after the figures "2017", the words, brackets, figures and letters "other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above" shall be inserted; d. after item (v) and entries relating thereto in column (3), (4) and (5), the following items and entries shall be inserted, namely, - (3) (4) (va) Composite supply of works contract as 6 defined in clause (119) of section 2 of the Tamil Nadu Goods and Services Tax Act, 2017, other erection, than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above, supplied by way of construction, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of affordable residential apartments covered by sub-clause (a) of clause (xvi) of paragraph 4 below, in a project which commences on or after 1st April, 2019, or in an ongoing project in respect of which the promoter has not exercised option to (5) Provided that carpet area of the affordable residential apartments as specified in the entry in column (3) relating to this item, is not less than 50 per cent. of the total carpet area of all the apartmen....
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.... (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of item (vi)", the word, brackets figures and letters "(i), (ia); (ib), (ic), (id), (ie) and (if)" shall be substituted; after serial number 38 in column (1) and the entries relating thereto in column (2), (3), (4) and (5), the following serial number and entries shall be inserted, namely: - (1) (2) "39. Chapter 99 (3) Supply of services other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI) by an unregistered person to a promoter for construction of a project on which tax is payable by the recipient of the services under sub-section 4 of section 9 of the Tamil Nadu Goods and Services Tax Act, 2017 (TN Act 19 of 2017), as prescribed in the Commercial Taxes and Registration Department Notification No.II(2)/ CTR/269(c-5)/2019, published at page 23 in Part II-Section 2 of the Tamil Nadu Government Gazette, Extraordinary, dated 4th a 2010 (4) (5) Explanation.- This entry is to be taken to apply to all services which satisfy the condi....
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....tial apartment in a project which commences on or after 1st April, 2019, or in an ongoing project in respect of which the promoter has not exercised option in the prescribed form to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty five lakhs rupees. For the purpose of this clause, - (i) Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR) with their respective geographical limits prescribed by an order issued by the Central or State Government in this regard; (ii) Gross amount shall be the sum total of; - A. Consideration charged for the services specified at item (i) and (ic) in column (3) against Sl. No.3 in the Table; B. Amount charged for the transfer of land or undivided share of land, as the case may be including by way of lease or sub-lease; and C. Any oth....
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....irst occupation of the project has not taken place on or before the 31st March, 2019; (d) apartments being constructed under the project have been, partly or wholly, booked on or before the 31st March, 2019. Explanation. For the purpose of sub-clause (a) and (b) above, construction of a project shall be considered to have started on or before the 31st March, 2019, if the earthwork for site preparation for the project has been completed and excavation for foundation has started on or before the 31st March, 2019. (xxi) "commencement certificate" means the commencement certificate or the building permit or the construction permit, by whatever name called issued by the competent authority to allow or permit the promoter to begin development works on an immovable property, as per the sanctioned plan; (xxii) "development works" means the external development works and internal development works on immovable property; (xxiii) "external development works" includes roads and road systems landscaping, water supply, sewage and drainage systems, electricity supply transformer, sub-station, solid waste management and disposal or any other work which may have to be executed in th....
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....er 1st April, 2019, shall be calculated project wise for all projects which commence on or after 1st April, 2019 or ongoing projects in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, in the prescribed manner, before the due date for furnishing of the return for the month of September following the end of financial year 2018-19, in the following manner: 1. Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock (a) Input tax credit on inputs and input services attributable to construction of residential portion in a REP, which has time of supply on or after 1st April, 2019, may be denoted as Tx. Tx shall be calculated as under: (b) Tx=T-Te Where, (i) T is the total ITC availed (utilized or not) on inputs and input services used in construction of the REP from 1st July, 2017 to 31st March, 2019 including transitional credit taken on 1st July, 2017; (ii) Te is the eligible ITC attributable to (a) construction of commercial portion and (b) construction of residential portion, in th....
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....in T3 T-(TI+T2) TI ITC attributable exclusively to construction of commercial portion in the REP = == T2 = ITC attributable exclusively to construction of residential portion in the REP (d) and Tr is the ITC attributable to construction of residential portion in the REP which has time of supply on or before 31.03.2019 and which shall be calculated as under, Tr= (T3+T2) F1 * F2 * F3* F4 or Tr= (T-T1) F1 * F2 * F3* F4 The amounts 'Tx' and 'Te' shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. (e) Where, Tx is positive, i.e. TeT, the registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential portion in the REP, for which he shall not otherwise be eligible, to the extent of difference between Te and T. (g) The registered person may calculate Tc and utilize credit to the extent of Tc for payment of tax on commercial apartments, till the complete accounting of Tx is carried out and submitted. (h) Where percentage completion is zero but ITC has been availed on goods and services received for the project on or prior to 31....
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....tage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 percent. points; the value of percentage invoicing shall be deemed to be percentage completion plus 25 percent. points; where the value of invoices issued on or prior to 31st March, 2019 exceeds the consideration actually received on or prior to 31st March, 2019 by more than 25 percent.of consideration actually received; the value of such invoices for the purpose of determination of percentage invoicing shall be deemed to be actual consideration received plus 25 percent. of the actual consideration received; and (iii) where, the value of procurement of inputs and input services prior to 1st April, 2019 exceeds the value of actual consumption of the inputs and input services used in the percentage of construction completed as on 31st March, 2019 by more than 25 percent. of value of actual consumption of inputs and input services, the jurisdictional commissioner or any other officer authorized in this regard may fix the Te based on actual per unit consumption of inputs and input services based on the docume....
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....ct 100 units 2 No. of residential apartments in the project 75 units 3 Carpet area of the residential apartment 70 sqm 4 Total carpet area of the residential apartments C2 - C3 5250 sqm 5 value of each residential apartment 0.60 crore 6 Total value of the residential apartments C2* C5 45.00 crore 7 No. of commercial apartments in the project 25 units: 8 Carpet area of the commercial apartment 30 sqm 9 Total carpet area of the commercial apartments C7* C8 750 sam 10 Total carpet area of the project (Resi+Com) C4+C9 6000 sqm Percentage completion (Pc) as on 31.03.2019 [as declared to RERA or II determined by chertered engineer] 20% 12 No of residential apartments booked before transition 40 units 13 Total carpet area of the residential apartments booked before transition C12C3 2800 sqm C5-C12 24 crore 15 14 Value of booked residential apartments Percentage invoicing of booked residential apartments on or before 31.03.2019 16 17 Total value of supply of residential apartments having t.o.s. prior to transition ITC to be reversed on transition, Tx T-Te 60% C14 C15 14.4 crore 18 Eligible ITC (Te)- Te+Tr 19 T(*see no....
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....ortion in a Residential Real estate project (RREP), which has time of supply on or after 1st April, 2019, shall be calculated project wise for all projects which commence on or after 1st April, 2019 or ongoing projects in respect of which the promoter has not exercised option to pay state tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, in the prescribed manner, before the due date for furnishing of the return for the month of September following the end of financial year 2018-19, in the following manner: 1. Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock (a) Input tax credit on inputs and input services attributable to construction of residential and commercial portion in an RREP, which has time of supply on or after 1st April, 2019, may be denoted as Tx. Tx shall be calculated as under: Where, (b) Tx=T-Te (i) T is the total ITC availed (utilized or not) on inputs and input services used in construction of the RREP from 1st July, 2017 to 31st March, 2019 including transitional credit taken on 1st July, 2017; (ii) Te is the eligible ITC attribu....
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.... paid or taken credit of, as the case may be, as prescribed above, with the modification that percentage completion for calculation of F4 shall be taken as the percentage completion which, as certified by an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (Central Act 20 of 1972) or a chartered engineer registered with the Institution of Engineers (India), can be achieved with the input services received and inputs in stock as on 31st March, 2019. 2. Where % completion as on 31st March, 2019 is zero but invoicing has been done having time of supply before 31st March, 2019, and no input services or inputs have been received as on 31st March, 2019, "Te" shall be calculated as follows: - (a) Input tax credit on inputs and input services attributable to construction of residential and commercial portion in an RREP, which has time of supply on or before 31st March, 2019 may be denoted as Te which shall be calculated as under, * Te Tn F1 F2 * F3 Where, - Tn Tax paid on such inputs and input services on which ITC is available under the Tamil Nadu Goods and Services Tax Act, received in 2019-20 for construction of residenti....
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....ntial apartment 0.60 crore Percentage completion as on 31.03.2019 [as declared to RERA or determined by 6 chertered engineer] 20% 7 No of apartments booked before transition 8 Total carpet area of the residential apartment booked before transition 9 Value of booked residential apartments 10 Percentage invoicing of booked residential apartments on or before 31.03.2019 11 12 Total value of supply of residential apartments having t.o.s. prior to transition ITC to be reversed on transition, Tx= T-Te C3 * C7 80 units 5600 sqm C5* C7 48 crore 20% C9*C10 9.6 crore 13 14 Eligible ITC (Te)-Tx F1 x F2 x F3 x F4) T(see notes below) 15 FI 17 18 678 16 F2 F3 F4 19 Eligible ITC (Te)-Tx F1 x F2 x F3 x F4) 20 ITC to be reversed on transition, Tx T- Te *Note:- I crore I C8/C4 0.8 C11/C9 1/C6 0.2 5 C14 * C15 * C16 *C17 *C18 C14-C19 0.8 crore 0.2 Ñтоге 1. The value of T at C14 has been estimated for illustration based on weighted average tax on inputs. 2. In actual practice, the registered person shall take 'aggregate of ITC taken as declared in GSTR-3B of tax periods from 1.7.2017 or commencemnt of project which is later an....
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....plication of both the caps) 36 ITC to be reversed/taken on transition, Tx= T- Te (after application of both the caps) C14 C15 C34 C26 * C18 C14-C35 1.67 -0.67 Crore *Note:- 1. The value of T at C14 has been estimated for illustration based on weighted average tax on inputs. 2. In actual practice, the registered person shall take 'aggregate of ITC taken as declared in GSTR-3B of tax periods from 1.7.2017 or commencemnt of project which is later and transitional credit taken under section 140 of CGST Act' as value of T. Annexure III Illustration 1: A promoter has procured following goods and services [other than capital goods and services by way of grant of development rights, long term lease of land or FSI] for construction of a residential real estate project during a financial year. SI. No. Name of input goods and Percentage of input services goods and received during services the Whether inputs received from registered supplier? (Y/N) financial year 1 Sand 10 Y 2 Cement 15 N 3 Steel 20 Y 4 Bricks 15 Y 5 Flooring tiles 10 Y 6 Paints 5 Y 7 Architect/ designing/ CAD- 10 drawing etc. 8 Aluminium windows, Ply, 15 Y commerc....
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....ts 5 7 Architect/ designing/ CAD 10 drawing etc. 8 Aluminium windows 15 9 Ply, commercial wood 10 (Y/N) N N Y Y T Y Y Y N N In this example, the promoter has procured 50 per cent.of goods and services from a GST registered person. However, he has procured sand, cement and aluminum windows, ply and commercial wood etc. from an unregistered supplier. Thus, value of goods and services procured from registered suppliers during a financial year falls short of threshold limit of 80 per cent. To fulfill his tax liability on the shortfall of 30 per cent.from mandatory purchase, the promoterhas to pay GST on cement at the applicable rate on reverse charge basis. After payment of GST on cement, on the remaining shortfall of 15 per cent., the promoter shall pay tax @ 18 per cent. under RCM. Annexure IV FORM (Form for exercising one time option to pay tax on construction of apartments in a project by the promoters at the rate as specified for item (ie) or (if), against serial number 3 in the Table in this notification, as the case may be, by the 10th of May, 2019) Reference No. To Date (To be addressed to the jurisdictional Commissioner) GSTIN: 1234 2. ....