TaxTMI 
TaxTMI 
TaxTMI 
Seeks to amend MGST Act so as to exempt certain services as recommended by Goods and Services Tax Council for real estate sector.
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....nt of Meghalaya Excise, Registration, Taxation & Stamps Department Memo No. ERTS(T) 4/2019/195-A Dated Shillong the 29th March, 2019. ============= Document 1GOVERNMENT OF MEGHALAYA EXCISE, REGISTRATION, TAXATION & STAMPS DEPARTMENT NOTIFICATION No. 03/2019-State Tax (Rate) Dated Shillong the 29th March, 2019. No. ERTS(T) 4/2019/195 - In exercise of the powers conferred by sub-sections (1), (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Meghalaya Goods and Services Tax Act, 2017 (Act 10 of 2017), the Government of Meghalaya, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the ERTS Department notification No. ERTS (T) 65/2017/11, dated the 29th June, 2017, published in the Gazette of Meghalaya, Extraordinary, Part II A, vide number 98, dated the 5th July, 2017, namely:- In the said notification, - (i) in the opening paragraph, (a) (b) (c) after the word, brackets and figures "conferred by sub-section (1),", the word, brackets and figures "sub-section (3) and sub-section ....
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....hall apply for valuation of this service) (ib) Construction of commercial apartments (shops, offices, godowns etc.) 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 may be, in the manner prescribed therein, intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) (ic) Construction of affordable residential apartments by a promoter in a Real Estate Project (herein after referred to as REP) other than 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 therein, intend....
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....ts first occupation, whichever is earlier. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) 3.75 (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 apartments to his buyers independently. Provided also that eighty percent of value of input and input 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), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only; Provided also that inputs and input services on which tax is paid on reverse charge basis shall be deemed to have been purchased from registered person; Provided also that where value of input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of completion certificate or first occupation ....
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....project, the registered person shall exercise one time option in the Form at Annexure IV to pay state tax on construction of apartments in a project at the rates as specified for item (ie) or (if), as the case may be, by the 10th of May, 2019; Provided also that where the option is not exercised in Form at annexure IV by the 10th of May, 2019, option to pay tax at the rates as applicable to item (i) or (ia) or (ib) or (ic) or (id) above, as the 4 Page (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, but excluding supply by way of services specified at items (i), (ia), (ib), (ic), (id) and (ie) above intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent author....
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.... carpet area of all the apartments in the project; Provided also that for the purpose of determining whether the apartments at the time of supply of the service are affordable residential apartments as specified covered by sub-clause (a) of clause (xvi) of paragraph 4 below or not, value of the apartments shall be the value of similar apartments booked nearest to the date of signing of the contract for supply of the service specified in the entry in column (3) relating to this item; Provided also that in case it finally turns out that the carpet area of the affordable residential apartments as specified booked or sold before or after completion, for which gross amount actually 6 | Page charged was forty five lakhs rupees or less and the actual carpet in area was within the limits prescribed sub-clause (a) of clause (xvi) of paragraph 4 below, was less than 50 per cent. of the total carpet area of all the apartments in the project, the recipient of the service, that is, the promoter shall be liable to pay such amount of tax on reverse charge basis as is equal to the difference between the tax payable on the service the applicable rate but for the rate prescribed herein and the tax a....
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....v); sub-item (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of item (vi)," the word, brackets, letters and figures" (i) (ia), (ib), (ic), (id), (ie) and (if)" shall be substituted; (b) in the Explanation, after the words "this paragraph" the words "and paragraph 2A below" shall be inserted; (iv) after paragraph 2, the following paragraph shall be inserted, namely, - "2A. Where a registered person transfers development right or FSI (including additional FSI) to a promoter against consideration, wholly or partly, in the form of construction of apartments, the value of construction service in respect of such apartments shall be deemed to be equal to the Total Amount charged for similar apartments in the project from the independent buyers, other than the person transferring the development right or FSI (including additional FSI), 8| Page nearest to the date on which such development right or FSI (including additional FSI) is transferred to the promoter, less the value of transfer of land, if any, as prescribed in paragraph 2 above." (v) in paragraph 4 relating to Explanation, after clause (xii), the following clauses shall be inserted, namely: - "(xiii....
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....tem (iv); sub-item (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of 9 Page item (vi). against serial number 3 of the Table above, 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." (xvii) the term "promoter" shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (xviii) the term."Real Estate Project (REP)" shall have the same meaning as assigned to it in in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (xix) the term "Residential Real Estate Project (RREP)" shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP. (xx) the term "ongoing project" shall mean a project which meets all the following conditions, namely- (a) commencement certificate in respect of the project, where required to be issued by the competent authority, has been issued on or before 31st Ma....
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....e safety requirements, social infrastructure such as educational health and other public amenities or any other work in a project for its benefit, as per sanctioned plans; (xxv) the term "competent authority" as mentioned in definition of “commencement certificate" and "residential apartment", means the local authority or any authority created or established under any law for the time being in force by the Central Government or State Government or Union Territory Government, which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property; (xxvi) The term "carpet area" shall have the same meaning assigned to it in in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (xxvii) the term "Real Estate Regulatory Authority" shall mean the Authority established under sub-section (1) of section 20 (1) of the Real Estate (Regulation and Development) Act, 2016 (No. 16 of 2016) by the Central Government or State Government; (xxviii) "project which commences on or after 1st April, 2019" shall mean a project other than an ongoing project; (xxix) "Residential apartment" shal....
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....dential Real estate project (RREP) Input tax credit attributable to construction of residential portion in a real estate project (REP) other than 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 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) (ii) 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....
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....f commercial apartments in the REP/ total carpet area of commercial and residential apartments in the REP); Wherein 14 Page (d) T3 T-(T1 T2) T1 = ITC attributable exclusively to construction of commercial portion in the REP T2 = ITC attributable exclusively to construction of residential portion in the REP 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)* Fâ‚ * 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 comp....
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.... the following situations as under: (i) (ii) (iii) where percentage invoicing is more than the percentage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 per cent. 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 per cent. of consideration actually received; the value of such invoices for the purpose determination of percentage invoicing shall be deemed to beactual consideration received plus 25 percent. of the actual consideration received; and of 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 16 | Page 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 t....
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.... residential apartments in the project 75 units 3 Carpet area of the residential apartment 70 sam 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 C2C5 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 sqm 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 11 determined by chertered engineer] 20% 12 No of residential apartments booked before transition 40 units 13 14 Total carpet area of the residential apartments booked before transition Value of booked residential apartments C12-03 C5-C12 2800 sqm 24 crore 15 16 17 Percentage invoicing of booked residential apartments on or before 31.03.2019 Total value of supply of residential apartments having to s prior to transition TTC to be reversed on transition, Tx= T- Te 60% C14 C15 14.4 crore 18 Eligible TTC (Te) Tc Tr 19 T(see notes below) 1 crore 20 Te Tx (carpet area of commercial apartments in the REP/ total carpet area of c....
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....ch 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) (i) (ii) Tx=T-Te 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; Te is the eligible ITC attributable to construction of commercial portion and construction of residentia....
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.... 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 (20 of 20 Page 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* F * F2 * F3 Where, - Tn Tax paid on such inputs and input services on which ITC is available under the CGST Act, received in 2019-20 for construction of residential and commercial apartments in the RREP. F1, F2 and F3 shall be the same as in p....
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....d engineer] 20% 7 No of apartments booked before transition 8 Total carpet area of the residential apartment booked before transition C3 * C7 80 units 5600 sqm 9 Value of booked residential apartments C5 * C7 48 crore 10 Percentage invoicing of booked residential apartments on or before 31.03.2019 20% 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 C9 * C10 9.6 crore 13 Eligible ITC (Te)=Tx F1 x F2 x F3 x F4) 14 T(*see notes below) 1 Ñтоге 15 F1 16 F2 17 F3 18 14 19 Eligible ITC (Te)=Tx F1 x F2 x F3 x F4) C8/C4 C11/C9 1/C6 C14 * C15 *C16*C17*C18 0.8 Crore 0.8 0.2 5 182 20 ITC to be reversed on transition, Tx= T-Te C14-C19 0.2 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. 22 Page Illustration 2: Details of a residential real estate project (RREP) Sl No A B C D 1 No. of apa....
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..... 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. - Sd/- H. Marwein Additional Chief Secretary to the Government of Meghalaya Excise, Registration, Taxation & Stamps Department 23 Page Illustration 1: Annexure III 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. Name of input goods and Percentage No. services of input Whether inputs received goods and services from registered supplier? received during the (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 Y drawing etc. 8 Aluminium windows, Ply, 15 Y commercial wood In this example, the promoter has procured 80 per cent. of goods and services [other than services by way of grant of development rights, long term lease of land (against upfront payment in the ....