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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....al Chief Secretary to the Government of Meghalaya Excise, Registration, Taxation & Stamps Department Memo No. ERTS(T) 4/2019/195-A Dated Shillong the 29^th 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),", th....
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.... 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) (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 ....
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....ner 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) 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 pu....
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....nything contained in Explanation 1 above, tax on cement received from unregistered person shall be paid in the month in which cement is received. 3. Input Tax Credit not availed shall be reported every month by reporting the same as ineligible credit in GSTR-3B [Row No. 4 (D)(2)]. Provided that in case of ongoing 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 a....
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....roject 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), as the case may be, in the manner prescribed therein, (4) 6 (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 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 act....
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....ces Tax Act, 2017 (Act 10 of 2017), as prescribed in notification No. 07 / 2019- State Tax (Rate), dated 29th March, 2019. Explanation. - This entry is to be taken to apply to all services which satisfy the conditions prescribed herein, even though they may be covered by a more specific chapter, section or heading elsewhere in this notification. (4) (5) 9 (iii) in paragraph 2,- (a) for the words, brackets, letters and figures "sub-item (b), sub-item (c), sub-item (d), sub-item (da) and sub-item (db) of item (iv); 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 shal....
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....es 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 other amount charged by the promoter from the buyer of the apartment including preferential locationcharges, development charges, parking charges, common facility charges etc.; (b) an apartment being constructed in an ongoing project under any of the schemes specified in sub-item (b), sub-item (c), sub-item (d), sub-item (da) and sub-item (db) of item (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 a....
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....road systems landscaping, water supply, seweage and drainage systems, electricity supply transformer, sub-station, solid waste management and disposal or any other work which may have to be executed in the periphery of, or outside, a project for its benefit, as may be provided under the local laws; (xxiv) "internal development works" means roads, footpaths, water supply, sewers, drains, parks, tree planting, street lighting, provision for community buildings and for treatment and disposal of sewage and sullage water, solid waste management and disposal, water conservation, energy management, fire protection and fire 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 ....
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....IC, Shillong for uploading in the Meghalaya Website. By order etc., Beyph Deputy Secretary to the Government of Meghalaya Excise, Registration, Taxation & Stamps Department Note: The principal notification No. ERTS (T) 65/2017/11, dated the 29th June, 2017 and was published in the Gazette of Meghalaya, Extraordinary, Part II A, vide number 98, dated the 5th July, 2017 and was last amended by No. 27/2018 - State Tax (Rate) issued vide notification No. ERTS (T) 65/2017/472 dated the 31st December, 2018 published in the Gazette of Meghalaya, Extraordinary, Part II A vide number 15, dated the 18th January, 2019. 12 Page Annexure I Real estate project (REP) other than Residential 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) a....
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....rms of section 4 and section 11 of Real Estate (Regulation and Development) Act, 2016 (16 of 2016) and where the same is not required to be declared to the Real Estate Regulatory Authority, it shall be got determined and certified by an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972) or a chartered engineer registered with the Institution of Engineers (India). (c) A registered person shall have the option to calculate 'Te' in the manner prescribed below instead of the manner prescribed in (b) above,- Te shall be calculated as under: Te TcT1 + Tr = Where, - Tc is the ITC attributable to construction of commercial portion in the REP, calculated as under: Tc =T3* (carpet area of 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 31.0....
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....on in the REP which has time of supply on or before 31st March, 2019 and which shall be calculated as under, * TrTn F1 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 REP F1, F2 and F3 shall be the same as in para 1 above (b) 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 the amount of Te. (c) The amount 'Te' shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. 3. Notwithstanding anything contained in paragraph 1 or paragraph 2 above, Te shall be determined in 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 ....
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....) 1 crore 20 20 Te= Tx (carpet area of commercial apartments in the REP/ total carpet area C19 * (C9/C10) 0.125 crore T-TxF1 x F2 x F3 x F4 21 of commercial and residential apartments in the REP) 22 F1 23 F2 24 F3 25 F4 26 TTx F1 x F2 x F3 x F4 27 Eligible ITC (Te)=Tc + Tr 28 ITC to be reversed on transition, Tx= T-Te * Note:- C4/C10 0.875 C13/C4 0.533 C16/C14 0.200 1/C11 5 C19 C22 C23 * C24 * C25 0.467 crore C26+ C20 C19 C27 0.592 crore 0.408 crore 1. The value of T at C19 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. 17 | Page Illustration 2: Details of a REP (Res+ Com) SL. No A B C D I No. of apartments in the project 100 units 2 No. of 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.....
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....t.o.s. prior to transition after application of cap vis-a-vis consideration received 8 cr+25% of 8 Cr 10.00 crore 43 F3 after application of both the caps C42 / C14 0.42 44 T-TxF1 x F2 x F3 x F4 (after application of both the caps) C19 C22 C23 * C43 * C25 0.97 45 Eligible ITC (Te)-Tc + Tr (after application of both the caps) C20 + C44 1.10 46 46 ITC to be reversed/taken on transition, Tx= T- Te (after application of both the crore cans) C19-C45 -0.10 * Note:- 1. The value of T at C19 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 - Sd/- H. Marwein Additional Chief Secretary to the Government of Meghalaya Excise, Registration, Taxation & Stamps Department 18 | Page Annexure II Residential Real estate project (RREP) Input tax credit attributable to construction of residential and commercial portion in a Residential Real estate project (RREP), which has time of supply on or af....
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....ulatory Authority in terms of section 4 and section 11 of Real Estate (Regulation and Development) Act, 2016 and where the same is not required to be declared to the Real Estate Regulatory Authority, it shall be got determined and certified by an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972) or a chartered engineer registered with the Institution of Engineers (India). (c) The amounts 'Tx' and 'Te' shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. (d) Where, Tx is positive, i.e. Te T, the registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of the RREP, for which he shall not otherwise be eligible, to the extent of difference between Te and T. (f) Where percentage completion is zero but ITC has been availed on goods and services received for the project on or prior to 31st March, 2019, input tax credit attributable to construction of residential and commercial portion which has time of supply on or after 1st April, 2019, shall be calculated and the amount equal to Tx sh....
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....for the purpose of determination of percentage invoicing shall be deemed to be actual consideration received plus 25 per cent. of the actual consideration received; and 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 per cent. 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 documents duly certified by a chartered accountant or cost accountant submitted by the promoter in this regard, applying the accepted principles of accounting. 21 Page Illustration 1: SI No Details of a residential real estate project (RREP) A B C Ꭰ1 No. of apartments in the project 2 No. of residential apartments in the project 3 Carpet area of the residential apartment 4 Total carpet area of the residential apartments C2 * C3 5 value of each residential apartment 100 units 100 units 70 sqm 7000....
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....= T-Te 1 crore 1 C8/C4 0.8 C11/C9 1/C6 0.6 5 C14 * C15 * C16 *C17*C18 C14-C19 2.4 crore -1.4 crore 21 Tx after application of cap on % invoicing vis-a-vis Pc 22 % completion 20% 23 % invoicing 60% 24 % invoicing after application of cap(Pc+25%) C6+25 % 45% 25 Total value of supply of residential apartments having t.o.s. prior to transition 26 F3 after application of cap C9 * C24 C25/C9 21.60 crore 0.45 27 Te=Tx F1 x F2 x F3 x F4 (after application of cap) C14* C15 C16 * C26 * C18 1.80 crore 28 ITC to be reversed / taken on transition, Tx= T- Te (after application of cap) C14-C27 -0.80 crore 29 30 Tx after application of cap on % invoicing vis-a-vis Pc and payment realisation % invoicing after application of cap(Pc+25%) 45% 31 32 Total value of supply of residential apartments having t.o.s. prior to transition consideration received C25 21.60 crore 16.00 Ñтоте 33 Total value of supply of residential apartments having t.o.s. prior to transition after application of cap vis-a-vis consideration received 16 cr+ 25% of 16 Cr 20.00 crore 34 F3 after application of both the caps 35 Te Tx F1 x F2 x F3 x F4 ....
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....ther inputs received No. services goods and services from registered supplier? received during the (Y/N) financial year 1 Sand 10 Y 2 Cement 15 Y 3 Steel 20 Y 4 Bricks 15 Y. 5 Flooring tiles 10 Y 6 Paints 5 N 7 Architect/ designing/ CAD 10 Y drawing etc. 8 Aluminium windows, Ply, 15 N commercial wood 24 Page - In this example, the promoter has procured 80 per cent. of goods and services including cement from a GST registered person. However, he has procured paints, aluminum windows, ply and commercial wood etc. from an unregistered supplier. Hence at the end of financial year, the promoterisnotrequired to pay GST on inputs on reverse charge basis. Illustration 3: A promoter has procured following goods and 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], 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 procur....