TaxTMI 
TaxTMI 
TaxTMI 
Amendments in G.O. No. 525 dated 29-6-2017 regarding Real Estate Residential Project
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....e recommendations of the Council, the Governor is pleased to allow to make the following further amendments in the notification of the Government of Uttarakhand, Finance Section-8, No. 525/2017/9(120)/XXVII(8)/2017 dated 29th June, 2017(as amended), 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 (4)" shall respectively be inserted; the word "and" before the words and figures "sub-section (5) of section 15" shall be substituted by the symbol 66.99. , after the word, brackets and figures "section 15", the words and figure", sub-section (1) of section 16 and section 148" shall be inserted; (ii) in the Table, - (a) against serial number 3, for item (i), and the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted, namely, - (3) Table (4) "(i) Construction of affordable residential apartments by a promoter in a Residential Real Estate Project (hereinafter referred to as RREP) which commences on or after 1st April, 2019 or in an ongoing RREP in respect of which the promote....
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....l 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 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; Provided also that where a registered person (landowner- promoter) who transfers development right or FSI (including additional FSI) to a promoter (developer- promoter) against consideration, wholly or partly, in the form of construction of apartments, - (i) the developer- promoter shall pay tax on supply of construction of apartments to the landowner- promoter, and - (ii) such landowner promoter shall be eligible for credit of taxes charged from him by the developer promoter towards the supply of construction of apartments by developer- promoter to him, provided the landowner- further supplies such apartments to his buyers promoter Page 2 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) (Provisions of paragraph 2 of this notification shall apply for valuation of this service) (ic) Construction....
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.... 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 further that inputs and input services on which tax is paid on reverse charge basis shall be deemed to have been purchased from registered person; Page 3 of 28 DT:/GST Notification/ Amendment in Noti, no. 525(02-04-2019)CTR-03(Eng) Page 4 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) 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 of the project, whichever is earlier) falls short of the said threshold of 80 per cent., State tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of nine percent on reverse charge basis and all the provisions of the Uttarakhand Goods and Services Tax Act, 2017 (06 of 2017) shall apply to him as if he is the person liable for paying the tax in relation to the supply of such goods or services or both; Provided notwithst....
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....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 case may be, shall be deemed to have been exercised; Provided also that invoices for supply of the service can be issued during the period from 1st April Page 5 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) (b) (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 authority or after its first occupation, first whichever is earlier. Explanation. -For the removal of doubt, it is hereby clarified that, supply by way of services specified at items (i), (ia), (ib), (ic), (id) and (ie) in column (3) shall attract State....
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....affordable residential apartments 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; Page 7 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019) CTR-03(Eng) Provided also that in case it apartments finally turns out that the carpet area of the affordable residential booked or sold before or after completion, for which gross amount actually charged was forty five lakhs rupees or less and the actual carpet area was within the limits prescribed in 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 (c) (d) liable to pay such amount of tax on reverse charge basis as is equal to the difference between the tax payable on the service at the applicable rate but for the rate prescribed herein and the tax actually paid at the rate prescribed herein"; e. in item (vi) in column (3), after the figures "2017", ....
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....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), 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 (ix), the following clauses shall be inserted, namely: - "(x) an apartment booked on or before the 31st March, 2019 shall mean an apartment which meet....
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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 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." (xiv) 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); (xv) 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); (xvi) 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 percent of the total carpet area of all the apartments in the REP. Page 10 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) (xvii) 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....
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....ater conservation, energy management, fire protection and fire safety requirements, social DT:/GST Notification/ Amendment in Noti, no. 525(02-04-2019) CTR-03(Eng) Page 11 of 28 infrastructure such as educational health and other public amenities or any other work in a project for its benefit, as per sanctioned plans; (xxii) 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; (xxiii) 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); (xxiv) 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 Governm....
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....* (carpet area of commercial apartments in the REP/ total carpet area of commercial and residential apartments 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 31st March, 2019 and which shall be calculated as under, * Tr= T F1 F2 * F3* F4 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) Page 13 of 28 F2= F3= Fâ‚= Where, - Carpet area of residential apartments in REP Total carpet area of commercial and residential apartments in the REP Total carpet area of residential apartment booked on or before 31st March, 2019 Total carpet area of the residential apartment in REP Such Value of supply of construction of residential apartments booked on or before 31st March, 2019 which has time of supply on or before March, 2019 31st Total value of supply of construction of residential apartments booked on or before 31st March, 2019 (F3 is to account for percentage invoicing of booked residential apartments) F4= % Completion of construction as on 31st March, 2019 Illustration: where one- fifth (twenty percent) of the construction has been completed, F4 shall be 100 20 = 5. ÷ Explanatio....
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....of residential portion which has time of supply on or after 1st April, 2019, shall be calculated and the amount equal to Tx shall be 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 (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 portion in a REP, which has time of supply on or before 31st March, 2019 may be denoted as Te which shall be calculated as under, = Te Tc + Tr Where, - Tc is the ITC attributable to construction of commercial portion in the REP, calculated as ....
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.... chartered accountant or cost accountant submitted by the promoter in this regard, applying the accepted principles of accounting. Page 17 of 28 DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) Illustration 1: Details of a REP (Res+ Com) SL No A B C D 1 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 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 sqm 10 Total carpet area of the project (Resi + Com) C4 + C9 6000 sqm 11 Percentage completion as on 31.03.2019 [as declared to RERA or 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 C12* C3 2800 sqm 14 Value of booked residential apartments C5* C12 24 crore Percentage invoicing of booked reside....
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.... Tx (carpet area of commercial apartments in the REP/ total carpet area of commercial and residential apartments in the REP) C19 * (C9/C10) 0.125 crore 21 Tr=Tx F1 x F2 x F3 x F4 22 F1 C4/C10 0.875 23 F2 C13/C4 0.533 24 F3 C16/C14 0.600 25 F4 1/C11 5 26 Tr=Tx F1 x F2 x F3 x F4 C19 C22 C23 * C24 * C25 1.400 crore 27 Eligible ITC (Te)=Tc + Tr C26+ C20 1.525 crore 28 ITC to be reversed/ taken on transition, Tx= T-Te C19 C27 -0.525 crore 29 Tx after application of cap on % invoicing vis-a-vis Pc 30 % completion 20% 31 % invoicing 60% 32 % invoicing after application of cap(Pc+25%) C11+25% 45% 33 Total value of supply of residential apartments having t.o.s. prior to transition C14*C32 10.80 crore 34 F3 after application of cap C33/C14 0.45 35 TrTx F1 x F2 x F3 x F4 (after application of cap) 36 Eligible ITC (Te)-Tc + Tr (after application of cap) C19 C22 C23 * C34 * C25 1.05 crore C20+ C35 1.18 crore 37 ITC to be reversed / taken on transition, Tx= T- Te (after application of cap) C19-C36 -0.18 crore 38 39 Tx after application of cap on % invoicing vis-a-vis Pc and payment realisation % invoicing after application of cap(Pc + 25%) 45% 40 41 Total value of supply of residential apartment....
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.... construction of residential portion, in the RREP which has time of supply on or before 31st March, 2019; Te shall be calculated as under: F= F2= Te T F1 F2 * F3* F4 Where, - Carpet area of residential and commercial apartments in the RREP Total carpet area of apartments in the RREP (In case of a Residential Real Estate Project, value of "F1" shall be 1.) Total carpet area of residential and commercial apartment booked on or before 31st March, 2019 Total carpet area of the residential and commercial apartment in the RREP DT:/GST Notification/ Amendment in Noti. no. 525(02-04-2019)CTR-03(Eng) Page 20 of 28 F3= Such value of supply of construction of residential and commercial apartments booked on or before 31st March, 2019 which has time of supply on or before 31st March, 2019 Total value of supply of construction of residential and commercial apartments booked on or before 31st March, 2019 (F3 is to account for percentage invoicing of booked residential apartments) F4= 1 % Completion of construction as on 31st March, 2019 Illustration: where one- fifth (twenty percent) of the construction has been completed, F4 shall be 100 20 = 5. Explanation: "% Completion of construction as on 3....
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....able 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 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 or commercial portion in the RREP, 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 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) 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 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 consid....
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....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. Page 24 of 28 DT:/GST Notification/ Amendment in Noti, no. 525(02-04-2019) CTR-03(Eng) Illustration 2: Details of a residential real estate project (RREP) SI No A B C D 1 No. of apartments in the project 100 units 2 No. of residential apartments in the project 100 units 3 Carpet area of the residential apartment 4 Total carpet area of the residential apartments C2 * C3 70 7000 sqm sqm 5 value of each residential apartment 0.60 crore Percentage completion as on 31.03.2019 [as declared to RERA or determined by 6 20% chertered engineer] 7 No of apartments booked before transition 80 units 8 Total carpet area of the residential apartment booked before transition C3 * C7 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 60% 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 28.8 crore 13 14 Eligible ITC (Te)=Tx F1 x F2 x F3 x F4) T(*see....
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....nts 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 percent of 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], from a GST registered person. However, he has procured cement from an unregistered supplier. Hence at the end of financial year, the promoter has to pay GST on cement at the applicable rates on reverse charge basis. Illustration 2: 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 of input Whether inputs received No. services goods and services from registered supplier? recei....