TaxTMI 
TaxTMI 
2019 (10) TMI 1020
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....ce Ruling under Section 97 of the CGST Act, 2017 and Section 97 of the KGST Act, 2017, in FORM GST ARA-01 discharging the fee of Rs. 5,000-00 each under the CGST Act and the KGST Act. 2. The Applicant is a Limited Liability Partnership and is registered under the Goods and Services Act, 2017. The applicant states that in the recent recommendation of GST Council in its 34th meeting held on 19.03.2019 regarding the construction service, new rates of taxes were made available, 1% without ITC on construction of affordable houses and 5% without ITC on construction of- a) All houses other than affordable houses in ongoing projects whether booked prior to or after 01.04.2019. b) All houses other than affordable houses in new p....
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....eement on 11.02.2019 to develop commercial space on land measuring 57,974 sq.ft, at Whitefield, Bangalore with 60:40 share, the LLP being entitled to 60% and the owners of the land to 40% of the built up area. 4. The applicant is of the view that the new rates of taxes recommended for housing projects are also available to their project of developing commercial complex. 4.1 The applicant, as a construction service provider, is eligible to utilise the ITC relating to the construction activities against the output tax payable on renting of commercial space. 4.2 The applicant states that they are providing accommodation to students. The lodging or boarding services provided by the educational institutions is exempted from GST. The pay....
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.... are observed from the agreement entered between the applicant and the landowners: (a) That the land belongs to the landowners and the same is offered to the applicant for development of a commercial property (b) The applicant shall construct the project in the property (c) The landowners shall be entitled to 40% of the built area with 40% share in the land and they are entitled to hold or sell, lease or otherwise dispose of their share of the built area along with 40% of the undivided interest in the property (d) The applicant who is the developer, shall be entitled to 60% of the built area with 60% share in the land and is also entitled to hold or sell, lease or otherwise dispose of their share of the b....
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....roviding construction services to the landowners to the extent of the value of the rights in land. 4.4 Hence the applicant is involved in the following supplies- (a) The supply of works contract construction service to the landowner to the extent of construction of building of the landowner share (b) The supply of works contract services to the prospective purchasers of constructed building with land in case he desires to supply the constructed building before completion to the prospective purchasers The applicant is also receiving the supply of development rights from the landowners. 4.5 Notification No.11/2017 - Central Tax (Rate) dated 28.06.2017, as amended by Notification No.3/2010 - Central Tax (Rate) ....
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....erm 'Real Estate Project (REP" shall have the same meaning as assigned to it in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);" Clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) defines the "Real Estate Project" as under: "(zn) "real estate project" means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements....
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....unt including when such goods or services or both are used in the course or furtherance of business." 6. Regarding the third question raised by the applicant, since the input tax credit is not available relating to his portion of the constructed building, the same is not available for utilization of it against the output tax payable on letting out of the same space. 7. In view of the foregoing, we rule as follows RULING 1. The tax rate applicable on the supply of construction service to the land owner in lieu of transfer of development rights to the promoters portion is liable to tax at 9% under CGST and 9% KGST under entry no 3(xii) of the Notification No.11/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification ....