TaxTMI 
TaxTMI 
2020 (1) TMI 740
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....dated 25.01.2018 with effect from 25.01.2018? 2. Whether the benefit of concessional rate would be available to common amenities such as club house, swimming pool and amenities of like nature? 3. Whether the project of the Applicant at Joyville, Virar qualifies as an 'ongoing project under Notification No. 3/2019-Central Tax (Rate) dated 29.03.2019 so as to be eligible for the concessional rate of benefit under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017? 4. What would be the rate of Goods and Services Tax on the units at Joyville, Virar which do not qualify the criteria of low cost houses'? Whether 12% or 18% tax is to be levied on those units? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE....
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....so submitted that, Notification No. 112017 has been amended by Notification No. 032019-C.T. (Rate) dated 29.03.2019 ("Notification No.3/2019") whereby the applicable rates of GST have been reduced for services of the residential construction sector and in respect of ongoing projects (as defined under Clause 4. (xx) of Notification No. 03/2019. An option has been given to suppliers of such services to continue payment of GST as per the erstwhile applicable rates. It further provided that suppliers, choosing to continue at the old rates under Notification No. 11/2017 should file a form in Ann-IV to the Jurisdictional Commissioner. Applicant has filed Ann. IV for the RERA Phases 1, 2, 3, and 5 with the concerned authorities. 2.6 Applicant submits that the Government had issued Notification No. 01/2018 which extended the benefit of concessional rate of 12% GST in respect of original works' pertaining to low cost houses up to 60 Sq. Mts. in an affordable housing project having infrastructure status. To avail the benefit of reduced rate of GST under entry (v) (da), Composite supply of works contract by way of construction, erection; commissioning or installation of original works has ....
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....hat even common amenities come within the purview of the definition of project' and hence, the benefit under Entry (v)(da) of Notification No. 11/2017 should be made applicable for the common amenities as well since the same are ancillary supply to the principal supply of construction of dwelling units. 2.8.3 Alternatively, it is submitted that in the case of 904 units being constructed at Joyville Virar which satisfy the criteria of 'low cost house', the corresponding benefit of reduced rate of GST of 12% under Entry (V)(da) of Notification No. 11/2017 should be given to the common amenities like club house, swimming pool and amenities of like nature. 2.9 THE PROJECT AT JOYVILLE VIRAR QUALIFIES AS AN ONGOING PROJECT UNDER NOTIFICATION NO.03/2019 2.9.1 Applicant submits that Notification No.3/2019 has provided a right to registered suppliers to either continue to discharge GST under entry 3(v)(da) of Notification No. 11/2017 or migrate to the new rate of GST as prescribed under entry (ie) of Notification No. 3/2019. However, Notification No.3/2019 provides that registered suppliers can discharge GST at the old rates with respect to projects which were being already underta....
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....of the demand note and bank statement reflecting the amount being credited in the bank account of Applicant prior to 31.03.2019 is also submitted). They have already filed Form IV with the jurisdictional Commissioner on 07.05.2019 for the phases of the project, (A copy of Ann IV as filed with the Jurisdictional Commissioner at the central & the state level is submitted.). 2.10 Applicant is also seeking clarity about the tax rate on the remaining units at Joyville Virar which do not satisfy the conditions attached to 'low cost house, whether the units can be taxed at 12% under Entry (V)(da) being part of the same housing project or should it be taxed at 18%. 03. CONTENTION - AS PER THE JURISDICTIONAL OFFICER: The jurisdictional office has made submissions as under:- 3.1 With respect to Question 1, it is submitted that there is no restriction on the supplier of the service whether it is developer or contractor and if the project fulfills the criteria / norms of an "Affordable Housing Project" which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th ....
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....nshu Jani, CFO appeared and made oral and written submissions. During the course of Final Hearing, applicant submitted one agreement copy and also partly reframed Question No. 2. Jurisdictional Officer Ms. Manjiri Phansalkar, DC (E-611), LTU-4 also attended. 05. OBSERVATIONS AND FINDINGS: Heard both sides. 5.1 We have gone through the facts of the case, documents on record and submissions made by the applicant as well as the jurisdictional office. 5.2 Applicant has submitted that in the subject project at Joyville Virar, out of the 4 phases currently under development, Phases 2, 3 and 5 have all the units of carpet area less than 60 square meters. However Phase 1 consists of two towers of 308 units, out of which 264 units have a carpet area of less than 60 sq. mtrs. (i.e. 83% of the total FSI). Applicant has further submitted that the balance two phases which will be taken up at a later stage have all units less then 60 sq. mtrs. The applicant has also submitted that all units in Phases 1, 2, 3 and 5 were sold out before 31.03.2019. 5.3 In view of the above facts, the applicant has raised the question: "Whether the dwelling units at Joyville, Virar qualify a....
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...." under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (e).............................................; or (f)............................................. 6 -] (v) Composite supply of works contract as defined in 6 clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (a)........................................; (b)........................................; (c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under- (1) the "Affordable Housing in Partnership" component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (2) any housing scheme of a State Government; (e)........
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....F. No. 13/6/2009-INF, dated the 30th March, 2017 would attract a tax rate of 12%. This clause will be applicable to the applicant if the project undertaken by them is an affordable housing project which has been given infrastructure status vide Government of India notification mentioned above. 5.3.6 Department of Economic Affairs' notification issued vide F. No. 13/6/2009-INF, dated the 30th March,2017 has included Affordable Housing under the column "Infrastructure sub-sector" against the category of Social and Commercial Infrastructure and has further defined "Affordable Housing", as a housing project using at least 50% of the Floor Area Ratio (FAR)/Floor Space Index (FS1) for dwelling units with carpet area of not more than 60 square meters and "Carpet Area" shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016. 5.3.7 One of the recommendations made by the GST Council in its 25th meeting held on 18th January 2018 at Delhi was to extend the concessional rate of 12% (8% GST after deducting value of land) to services by way of construction of low cost houses up to a carpet area of 60 sqm in ....
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.... project using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 SQM). No certificate from any authority is required." 5.3.9 We find that the total FSI consumed in the said project is greater than 50% for flats having carpet area below 60 sq mtrs. and therefore, their project falls under the definition of "Affordable Housing" as in DEA Notification mentioned above. We also find that all the units in Phase 1, 2, 3 and 5 have been booked prior to 31.03.2019. 5.3.10 Hence, from a reading of the above clarification, notification and the clause (da) of item (v) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017, we find that applicant's case is covered under the tax rate of 12% (8% GST after deducting value of land), under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended, since the project undertaken by applicant falls under the definition of "Affordable Housing". The benefit of reduced rate would be available to applicant only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and only in respect of dwelling units having c....
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.... F. No. 354/32/2019-TRU dated 14.05.2019, Government of India Ministry of Finance Department of Revenue (Tax Research Unit) issued FAQs (Part II) on real estate which is reproduced as under:- Sr.No. Question Answer 4 For the purpose of determining the threshold of Rs. 45 lakhs in case of "affordable residential apartment", whether the following charges generally recovered by the developer from the buyer shall be included? Amenity Charges * Society formation charges * Advance maintenance * Legal Charges For the purpose of determining the threshold of the gross amount of Rs. 45.00 lakh for affordable residential apartments, all the charges or amounts charged by the promoter from the buyer of the apartments shall form part of the gross amount charged. Clause xvi, sub-clause (a)(ii)(C) of paragraph 4 of notification No. 11/2017-CT(R) dated 28.06.2017, reproduced below, refers. "C. Any other amount charged by the promoter from the buyer of the apartment including preferential location charges, development charges, parking charges, common facility charges etc." However the value shall not include stamp duty payable to the statutory authority, maintenance char....
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....te of benefit under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017? 5.5.1 As per Sr.No. (xx) of Notification No. 3/2019-C.T.(Rate) dated 29.03.2019 an on-going project is defined as under:- (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 March, 2019, and it is certified by any of the following that construction of the project has started on or before 31st March, 2019:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority. (b) where commencement certificate in respect of the project, is not required to be issued by the competent authority, it is certified by any of the authorities specified in sub- clause (a) above that construction of the project....
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....9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended since the project undertaken by them fails under the definition of "Affordable Housing". The benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs., in this scheme which is covered in the category of affordable housing. In case of other flats which have carpet area more than 60 sq.mtrs. applicant would be required to pay GST at normal applicable rate i.e. @18% GST. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-29/2019-20/B-123 Mumbai, dt. 26-12-2019 For reasons as discussed in the body of the order, the questions are answered thus - Question 1. Whether the dwelling units at Joyville, Virar qualify as low cost houses'? Consequentially wheth....