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2021 (7) TMI 544
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....oing projects in compliance of the Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019 wherein it was mandated for service providers to opt for old rate as in force prior to the change in GST rates made as per the said notification, and if not opted, would automatically switch to the new rate of tax. 3.2. In compliance of the said notification, they opted for continuing with the old rate of tax on their ongoing project-Shanti Homes, Pothencode and filed Annexure - IV dated 08.05.2019 on 09.05.2019. They are in receipt of advances for the above project in some flats, for which booking was received in pre-GST period also for which amounts attributable to undivided share of land from customers were appropriated in books of accounts in pre-GST period. 3.3. Accordingly, they have filed this application seeking ruling on the following questions in respect of the services provided by them to the customers who are purchasers of the residential flats involved in the project-Santhi Homes, Pothencode in the light of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. a. What is the rat....
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....pe - L - 743 Sq ft if total consideration charged is less than Rs. 45 lakhs. vii. 2 BHK Apartment Type - E - 1182 Sqft. viii. 2 BHK Apartment Type - F - 1160 Sqft. ix. 2 BHK Apartment Type - J- 1118 Sq ft. x. 3 BHK Apartment Type - A- 1358 Sq ft. xi. 3 BHK Apartment Type - G - 1413 Sqft. xii. 3 BHK Apartment Type -K- 1499 Sq ft. d. In the event of cancellation of residential flats by any customer, whether the relevant date for application of refund of taxes already paid on advances is to be reckoned from date of payment voucher giving back the refund to the customer or is to be reckoned from the date of filing GSTR-3B for the month in which the tax on advances received were paid. 4. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The jurisdictional officer has not offered any comments and hence it is presumed that the jurisdictional officer has no specific comments to offer. It is also construed that there are no proceedings pending on the issue against the applicant. 5. Personal Hearing: The applicant was....
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....ion of the new tax structure for real estate sector. 6.2. In order to answer the questions raised by the applicant it is necessary to analyse not only the definitions of various terms under the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 but also the rate structure in respect of the service of construction of residential apartments as notified by Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 before and after its amendment with effect from 01.04.2019 by Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. 6.3. The term "ongoing project" is defined under clause (xx) of Para 4 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended by Notification No. 03/2019-CT (Rate) dated 29.03.2019 as follows; "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 t....
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....or for any other type of use ancillary to the purpose specified." 6.5. Clause (xvi) of Para 4 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017; defines the term "affordable residential apartment" as follows; "(xvi) the term -affordable residential apartment shall mean, - (a) a residential apartment in a project which commences on or after 1st April, 2019, or in an ongoing project in respect of which the promoter has not exercised option in the prescribed form to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be, having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty five lakhs rupees. For the purpose of this clause, - (i) Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR) with their respective geographical limits prescribed by an order issued by the Central or State Government i....
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....a), (db) and (g) in item (iv); insert sub-item (da) in item (v); substitute item (ix) and insert item (x), (xi) and (xii) in SI No.3. Consequential amendments were also made in Para 2 of the notification regarding value of supply of the specified services where the supply involved transfer of land or undivided share of land. The combined effect of the above amendments were that the composite supplies of works contract as defined in clause (119) of Section 2 of the CGST Act under the following specified schemes was extended a concessional rate of GST of 12% [6% - CGST + 6% SGST] and in cases where the supply involved transfer of land or undivided share of land the provisions of Para 2 of the notification applied for valuation of the service; (a) SI No. 3 (iv) (b) - Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana. (b) SI No. 3 (iv) (c) - In-situ redevelopment of existing slums using land as a resource, under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban). (c) SI No. 3 (iv) (d) - Beneficiary led individual house construction / enhancement under the Housing for All (Urban) Mission / Pradhan Mantri Awas Yojana. ....
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....e of option by the applicant to pay tax on the construction of the apartments in the project at the rates as specified for item (ie) or (if) of SI No. 3 of the said notification. 8. The first question of the applicant is regarding the rate of tax on the services of construction of different types of residential apartments in the project-Shanti Homes, Pothencode rendered to their customers during the period from 01.07.2017 to 31.03.2019. From the facts as disclosed by the applicant in the application, it is evident that the project Santhi Homes does not fall under any of the schemes listed in sub-paras (a) to (h) of Para 6.6 above and hence the services of construction of residential apartments in the project rendered by the applicant do not qualify for the concessional rate of tax of 12% under any of the sub-items or items of SI No. 3 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as listed in Para 6.6 above. Therefore, the services of construction of all the 12 different types of residential apartments as mentioned in the question in the project-Santhi Homes is liable to GST at the rate of 18% [9% - CGST + 9% - SGST] as per Item (i) of SI No. 3 of Notificat....
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....or undivided share of land is deemed to be one-third of the total amount charged for the supply irrespective of the actual value of land and accordingly the applicant is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply. 10. The third question raised by the applicant is regarding the applicable rate of tax for the period after 01.04.2019 where option was already exercised in respect of the 12 different categories of apartments mentioned therein and eligibility for one-third deduction as per Para 2 to the extent consideration for undivided share of land is also included. Consequent to the introduction of the new tax structure for real estate sector with effect from 01.04.2019 onwards by amendment of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 by Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019 the applicant has opted for continuing payment of tax at the old rates that have been specified in item (ie) or (if) of the said notification in respect of the services of construction of residential apartments in the ongoing project-Shanti Homes. We have already concluded that the ....