TaxTMI 
TaxTMI 
Minutes of the 33rd GST Council Meeting held on 20th and 24th February 2019
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....o attended the physical meeting on 24^th February, 2019 is at Annexure 2. 2. A list of Officers of the Centre, the States, GST Council Secretariat and the Goods and Services Tax Network (GSTN) who attended the Meeting through video conferencing on 20^th February, 2019 is at Annexure 3 arid those who attended the physical meeting on 24^th February, 2019 is at Annexure 4. 3. The following agenda items were discussed during the 33^rd Meeting of the Council. 1. Confirmation of the Minutes of 32^nd GST Council Meeting held on 10^th January 2019 issued by the Central Government 2. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the Central Government 3. Decisions of the GST Implementation Committee (GIC) for information of the Council 4. Decisions/recommendations of the IT Grievance Redressal Committee for information of the Council 5. Recommendations of the GoM for boosting Real Estate Sector under GST regime 6. Draft notifications and Removal of Difficulty order giving effect to the decisions of 32^nd GST Council Meeting regarding MSME (including small traders) 7. Any other agen....
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....irability of postal ballot was also discussed and it was decided that it was not required. He added that during the 1^st Meeting of the Council, the mechanism to resolve the issues where serious difference of opinion arises among the Members was also discussed. He further cited Rule 15 of Chapter VI of the Rules of Procedures and Conduct of Business in GST Council which deals with 'Division' and stated that it was unfortunate that the decision was being taken based on the interim report of GoM on Lottery when many Members including him were unable to attend the meeting of the GoM on Lottery. He added that the meeting of the GoM was held inspite of his and Punjab Minister's request to the Convenor of the GoM to postpone the meeting by a few days. He informed that due to health reason and doctor's advice, he was unable to travel and the Hon'ble Punjab Minister was presenting his Budget on the day of the meeting of the GoM. He stated that due to the manner in which the decision was being taken, he wanted to give advance notice to seek a division on the proposal on lottery. He stated that as per the Rules of Procedure, if a division was to be made, it should be in a....
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.... Estate sector, this issue should be discussed in this meeting through video conference and everyone could place his views through video conference. He added that the issue should be discussed and decided in this meeting. 4.6. Shri Rajesh Agarwal, Hon'ble Minister from Uttar Pradesh wished the Hon'ble Chairperson good health and then stated that the issues of Lottery and Real Estate were discussed in the last meeting of the Council and both should be finalized in this meeting after discussion through video conference. Shri Anurag Goel, Commissioner, State Tax (CST), Assam stated that his Hon'ble Minister had instructed to convey that both the issues, namely Lottery and Real Estate, should be discussed through video conference and decided today. Shri C.P. Singh, Hon'ble Minister from Jharkhand stated that the issue of Real Estate was very important for his State and suggested that this should be discussed and decided today, so that action could be initiated from today itself. As regards the agenda on Lottery, he stated that his State did not have Lottery. 4.7. Shri Suresh Bhardwaj, Hon'ble Minister from Himachal Pradesh stated that Real Estate was a badly a....
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.... the considerations of individual States and should think of the nation and take a decision on this issue today. 4.9. Shri Shanti Kumar Dhariwal, Hon'ble Minister from Rajasthan stated that the GoM on Real Estate could not discuss the issues in detail and all members of the GoM were not present in its meeting. Hence, he did not agree with the findings of the GoM on Real Estate. He added that a meeting through video conference should only be for issues of urgent nature and this was not such an urgent issue. He further stated that States were not able to properly place their views through video conference and therefore suggested to defer this agenda item to be discussed during a physical meeting. 4.10. Shri Subodh Uniyal, Hon'ble Minister from Uttarakhand stated that he supported the recommendations of the GoM on Real Estate. He further added that his State did not have Lottery. Shri Wochamo Odyuo, Additional Commissioner, State Tax, Nagaland stated that they wanted the Agenda on Lottery to be discussed and decided today. Shri Somesh Kumar, Principal Secretary (Finance), Telangana stated that his State had a robust Real Estate sector and they wanted an early decision for th....
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....to discuss these issues in a physical meeting. He observed that the intention behind these Agenda items was noble but certain rough edges needed to be addressed. 4.13. The Hon'ble Chairperson thanked all the Members for their good wishes. He then stated that there were 4 to 5 formal Agenda items which could first be taken up and then the issue of real estate could be discussed. During the discussion, it could be ascertained as to what was the extent of the difference of opinion and the extent to which it needed to be reconciled. He added that there was an urgency to decide the issue of Real Estate as this related to every State and lakhs of flats were lying unsold due to taxation issues. He stated that faster these issues were resolved, the better it would be for the States too. He suggested that the formal Agenda items could be done first and then the extent of divide or consensus on this issue could be ascertained. 4.14. The Hon'ble Chief Minister of Puducherry stated that the issue of apportionment of IGST to Puducherry and Delhi for the last financial year (2017-2018) had still not been resolved. In the last meeting, the Hon'ble Chairperson had requested the R....
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....amine the report of C&AG to work out the mechanism to deal with the issue. 4.16. The Hon'ble Deputy Chief Minister of Delhi stated that it was not a correct proposition to say that only if C&AG stated that the method of devolution was wrong, then the Government of India would act. This issue should not be dependent on the C&AG report as in principle, both Delhi and Puducherry should have got the fund and the money due to the States should have been distributed to them. The Hon'ble Chief Minister of Puducherry stated that the money lying in the Consolidated Fund of India during that time should have been distributed between the Centre and the States. He added that they were yet to get the settlement amount for the month of December, 2018 and January, 2019. He further stated that for a procedural mistake of the Union Finance Ministry, C&AG could not say much for the money which was due to them. The mistake occurred due to transfer of the IGST amount to the Consolidated Fund of lndia. 4.17. The Hon'ble Chairperson stated that he would meet the Hon'ble Chief Minister of Puducherry and the Hon'ble Deputy Chief Minister of Delhi along with their officers and, if pos....
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....y Sadhu-Sant, Kalpvasis and general public during Kumbh and other religious ceremonies during fast. Hence the State of Uttar Pradesh had requested time and again to exempt Dry Singhara from GST. He further stated that the present tax rate of 18% on handmade soap was quite high. He added that handmade soap was manufactured by small scale industries and by labour in the unorganized sector and that it was used by poor people in rural areas. Hence handmade soap should also be exempted from GST. The Hon'ble Chairperson observed that these requests should be examined by the Fitment Committee.' 6. For Agenda item 1, the Council decided to adopt the Minutes of the 32^nd Meeting of the GST Council with the following change: 6.1. To insert a new paragraph 36.2. in the Minutes and to incorporate the following therein: 'The Hon'ble Minister from Uttar Pradesh stated that Dry Singhara was used by Sadhu-Sant, Kalpvasis and general public during Kumbh and other religious ceremonies during fast. Hence the State of Uttar Pradesh had requested time and again to exempt Dry Singhara from GST. He further stated that the present tax rate of 18% on handmade soap was quite high. He a....
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....d Tax (Rate) 1 to 2 of 2019 UTGST Act Union territory tax 1 of 2019 Union territory tax (Rate) 1 of 2019 Circulars Under the CGST Act 88 to 91 of 2019 Under the IGST Act 4 of 2019 ROD Orders Under the CGST Act 1 to 2 of 2019 Under the UTGST Act 1 of 2019 Orders Under the CGST Act 1 of2019 8.1. The Notifications, Circulars and Orders issued by the States which are pari materia with above Notifications, Circulars and Orders were also deemed to have been ratified. Agenda Item 3: Decisions of the GST Implementation Committee (GIC) for information of the GST Council 9. Introducing this Agenda item, the Secretary stated that the decisions of the GIC post the 32^nd Meeting of the Council were circulated to all States and was part of this Agenda item. He further stated that the presentation on the decisions of GIC was also circulated to the States (attached as Annexure 5 to the Minutes) in advance of the Council Meeting, and no comments had been received from any States. He stated that the decisions of the GIC were placed before the Council for information. 10. For Agenda item 3, the Council took note of the dec....
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..... The Hon'ble Chairperson stated that this issue had been discussed in last 2-3 meetings and he meant to start the discussion so that members could express their views but it would not mean that decision would be taken without consensus. He advised that the discussion on this issue should not be vetoed. 13.1. The Hon'ble Deputy Chief Minister of Gujarat stated that as the GoM had submitted its recommendation before the Council, it should not be kept pending without discussion. Thus, discussion on it should be conducted so that the difficulty faced by this sector could be brought out before the Council. The Hon'ble Deputy Chief Minister of Bihar, supported the view and expressed his agreement with all the recommendations of the GoM and added that the tax rate of 3% proposed by the GoM on affordable houses may be reduced to 1%. He further drew the attention of the Council to mixed use projects i.e. projects having both residential and commercial property. He stated that the residential complexes also had some commercial activities like Kirana shop, vegetable shop, Parlor etc. within the same complex which catered to the needs of residents and hence 10% commercial property ....
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.... partnered with States in the economic development. He referred to the General Clauses Act and stated that the definition of land includes both land and benefits arising out of land. Thus, such transactions should be kept outside GST. 13.3. The Hon'ble Minister from Punjab raised another issue that levy of tax @18% on premium for long term lease for completed property would create an absurd situation where the GST on premium would be higher than the proposed tax of 5% on the property sold after completion. Thus, the sector would be having double taxation i.e. under the State law as well as GST law and hence long-term lease and TDR be kept out of the GST for all purposes, leaving it to States until Real Estate sector was brought under GST. He further stated that the proposed operational part did not suggest any mechanism of reversal of ITC (Input Tax Credit) in respect of completed property; valuation of unsold property; valuation of apartment after issue of completion certificate, as with the passage of time, the apartment may fetch higher value. Further, introducing composition without ITC would result in huge evasion by booking credit against projects that were taxable. He....
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....till supported the proposal to bring the entire Real Estate segment under GST whereas now only some part of it was coming under GST. He cautioned that this was becoming like VAT. He further stated that under construction projects, if brought under GST with levy of tax without lTC, it would lead to generation of black money. In fact, the Real Estate Sector wanted to be out of GST. He suggested to take a strong decision and bring the entire Real Estate sector under GST. The Hon'ble Minister from Rajasthan stated that when recommendation had not been examined by the Fitment Committee and the Law Committee, it was not correct to discuss such a proposal. Shri Priyavrat Singh, Hon'ble Minister from Madhya Pradesh also proposed a physical Council meeting for comprehensive discussions as the present proposal did not address the Real Estate Sector issue peculiar to rural and semi urban area, issues of mixed projects having larger commercial area or smaller area. Further, he stated that if tax was to be lowered to 5% on bigger buildings, then how poorer people were benefitting. 13.7. Shri D. Jayakumar, Hon'ble Minister from Tamil Nadu supported the recommendation of the GoM to lev....
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....ated the meeting could be convened on Wednesday / (27^th February 2019) which would give time to examine the proposal in detail by getting more data like the one highlighted by the Hon'ble Minister from Chhattisgarh. The Hon'ble Chairperson observed that data of individual builders may not be authentic as the component of cash and ITC may not be reliable; instead it was considered appropriate to analyze data obtained from NBCC which was a Government of India undertaking and they would have no cash dealing in their transactions and similarly, the States could consider obtaining data from State PWD and that the data from NBCC and PWD would be realistic to evaluate cash component for payment of tax as proposed. 13.9. The Hon'ble Minister from West Bengal drew attention to the data of tax rate and the tax paid in cash on page no. 173 of the agenda note where it was reflected that effective tax rate on the sector was 8.8% whereas the tax paid in cash was only 1.7 %. He stated that this limited data was also required to be examined in detail and proposed to have the meeting not before Wednesday. The Hon'ble Minister from Punjab applauded the decision of Hon'ble Chairperson....
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....rincipal Commissioner (GST Policy Wing), CBIC further stated that like other composition taxpayers, the composition taxpayers under the new scheme would also be eligible to avail the facility of filing annual return with quarterly payment which the Council had approved in its last Meeting for Composition taxpayers supplying only goods. He stated that for this, a suitable provision in Law would need to be made. In addition, there would be a need to incorporate a provision of reversal of input tax credit for those service providers who opted for the new composition scheme. He stated that these two issues would need to be discussed by the Law Committee and then brought before the GIC for approval. He requested the Council to permit GIC to approve the recommendations of the Law Committee on these two issues. The Council agreed to the same. 15.2. Shri Saswat Mishra, CST, Odisha stated that in the draft exemption notification for enhancing registration threshold to annual turnover of Rs. 40 lakh, it appeared that it was a compulsory provision in law and that taxpayers could not opt for registration and pay tax if their annual turnover was less than Rs. 40 lakh. He, therefore, suggeste....
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....law and order situation in Jammu & Kashmir, internet services, especially on the mobile phones, had remained suspended which had caused difficulty to the taxpayers in filing their return for January, 2019. He requested that the date for filing FORM GSTR-3B Return for January, 2019 for taxpayers located in Jammu & Kashmir should be extended till 28^th February 2019. The Hon'ble Chairperson suggested that the request of the State of Jammu & Kashmir could be agreed to. The Council agreed to the same. 18.1. The Hon'ble Deputy Chief Minister of Bihar stated that he had received information from many States that since the evening of 19^th February 2019, difficulty was being faced in filing FORM GSTR-3B Return for January, 2019 due to technical glitches. He suggested to extend the date of filing FORM GSTR-3B Return for January, 2019 for the entire country by 1 or 2 days if the glitch was not resolved in the next one hour or so. The Secretary informed that approximately only 25,000 returns had been filed during the last one hour and he requested CEO, GSTN to further elaborate on this issue. Shri Prakash Kumar, CEO, GSTN stated that from 11.30 AM today, there had been issues rela....
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....le Chairperson stated that keeping in view the sentiments expressed by the Members of the Council, the 33^rd Meeting of the GST Council was adjourned and it shall meet again in person on 24^th February 2019 in Delhi to continue discussions on the issues relating to Real Estate and Lottery. 21. The meeting ended with a vote of thanks to the Chair. Minutes of the Meeting of 24^th February, 2019 22. The thirty third Meeting of the Council reconvened on 24^th February 2019 at Vigyan Bhawan, New Delhi under the Chairpersonship of the Hon'ble Union Finance Minister Shri Arun Jaitley (hereinafter referred as the Chairperson). 23. The following agenda items were discussed during the reconvened 33^rd Meeting of the Council: (a) Agenda item 5: Recommendations of the GoM for boosting Real Estate Sector under GST regime (b) Agenda item 7: Any other agenda item with the permission of the Chairperson (i) Interim report of GoM on Lottery 24. The Hon'ble Chairperson stated that the 33^rd Meeting of the Council was adjourned on 20^th February 2019 to meet physically on 24^th February 2019 and he welcomed everyone to the reconvened 33^rd Meeting of t....
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.... of the term 'Affordable Housing' and thereafter appropriate tax rate for Affordable and non-affordable housing. The Fitment Committee considered the various data such as percentage distribution of house units sold in metropolitan and other cities of different values and of different standard sizes as per CREDAI data; existing tax pay out in cash in the real estate sector in different categories of housing and the sectoral revenue data pertaining to 7 major zones where the Real Estate Sector was concentrated so as to come out with recommendations in relation to the issue under reference. After detailed discussions, the Committee concluded that: i. As regards the definition of 'Affordable Housing', it already existed in the Notification relating to GST rates giving references such as of low-cost house up to 60 sqm in the erstwhile scheme of JNNURM, single residential units and houses under construction under PMAY, etc. Among these, a credit linked subsidy scheme of RBI was also there which covered houses for economically weaker sections, low income group houses, MIG-I and MlG-II houses having covered area up to 30 sqm, 60 sqm, 160 sqm and 200 sqm respectivel....
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....e) As regards concerns regarding the disruption of credit chain, the Fitment Committee had recommended that reporting of purchases and the method of apportionment may be made through the ITC Table of GSTR 3B to make it similar to ITC procedure of initial claim and thereafter reversal. Further, where supply had been shown to be received from a GST registered person who was found non-existent, it would be deemed that the purchase had been done from a non-registered person. RCM payment to be done on pro-rata basis, every month, with final adjustment at the end of the year. Fitment Committee was also of the view that alternatively, the proposal might be simplified by shifting tax liability on entire unregistered purchases on the developers under RCM at the merit rate of each purchase. (f) There would be certain details required to be worked out vis-a-vis transition from the old tax regime of ITC based taxation to the proposed scheme of taxation. Following principles would be adopted, while drafting the Notification: - i. ITC would be available only to the extent (calculated on pro-rata basis) of the value of the supply made out of the total value of supply for the pro....
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....erty might be apportioned to residential projects. iii. Purchases common to both commercial and residential construction might be apportioned in the ratio of the carpet area of residential and commercial projects under construction. iv. 80:20 ratio would be verified for residential segment at the end of the year and at the end of the project. v. Apportionment between immovable residential property sold "before Completion Certificate" and "after Completion Certificate" might not be required (lTC not available). (i) The date of implementation of this scheme could be 1^st April 2019. (j) As regards whether the scheme should be optional or mandatory, the Fitment Committee felt that having multiple methods of taxation would create complication. (k) The Fitment Committee also considered regarding any legal challenge for taxing TDR and concluded that there were none. (l) On the question whether the Real Estate should be brought under GST, the Fitment Committee noted that it involved larger issue of taxation which would require change in the Act and also possibly the Constitution of India. The Hon'ble Chairperson stated tha....
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....nce, from the point of view of the buyer, the position would remain the same as earlier and hence even if the tax rate was reduced, it would still be advantageous for him to wait for the project to be completed where he would have to pay no GST. In the restaurant sector also, similar things happened when the restaurants raised their base price after the tax on the sector was reduced to 5% without lTC. Hence, the proper solution to the problem lay in bringing both under-construction as well as completed property on the same footing. The issue related to policy decision, but States would not be impacted by it as they would get Stamp Duty. 25.4. The second issue, he explained, was that the proposed solution should be such that tax administration should be able to implement it in a transparent manner, instead of placing different tax liability for different people in different situations leaving scope for manipulation and evasion. In the proposal, tax was leviable not only in different manner but also there were provisions for apportionment of credit, reporting and reversal of credit, making the whole scheme complex. He explained further that in the proposed solution, complications ....
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....ad also proposed cut in tax rates for 'Affordable Houses'. Further, the inclusion of 15% commercial property being allowed in residential property development keeping in mind necessity of kirana shops, barber shops, repair and maintenance shops, etc. was a good suggestion. His State also supported the tax exemption on TDR, etc. However, as regards the issue as to whether the proposed tax rates should be optional or mandatory, he would favour that the option be given to buyers under old project to pay tax at old rate but for the new projects, there should be no option and the proposed tax rate should be compulsory. He further stated that most of the problems of the Real Estate sector would be resolved with solutions proposed by the Fitment Committee and the remaining unforeseen problems might be resolved as and when they arose. 25.6. The Hon'ble Deputy Chief Minister of Gujarat stated that the GoM had recommended tax rate of 5% for non-affordable category of housing whereas 3% rate or lesser for 'Affordable Housing'. Accordingly, his request was that the Council should address these two issues first, including the definition of 'Affordable Housing' and....
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.... introduce 1% tax was agreeable which was also in line with his suggestion. For non-affordable category, he had written in his letter to the Hon'ble Chairperson that keeping in view the principle of equity, the GST rate for houses in the price segment from Rs. 45 lakh to Rs. 1 crore should be at 5% without TTC while the houses above Rs. 1 crore (or maybe Rs. 1.5 crore), being rich men's purchases, be at 7% without ITC. The differential tax rates could be supported on the ground of simplicity along with equity in the economy. His suggestion to the Council was therefore, to consider two tax rates of 5% and 7% in non-affordable category as against the GoM recommendation of 5% for all houses above Rs. 45 lakh which could pass the test of simplicity but not of equity. 25.8. As regards the second issue regarding the definition of 'Affordable Housing', he stated that in the presentation of JS, TRU-ll, there was a shift from earlier recommendation of GoM based on 'either area or price' to a criterion which was based on 'area and price' . Thus, effectively to the definition of Affordable Housing in different Notifications, an additional criterion of financial....
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.... as who would recover the lTC and how it would be recovered, how to calculate the 15% commercial portion in the mixed property, etc. and hence the complications would benefit no one other than the persons raising the disputes. Similarly, the provision of apportionment and recovery of tax under RCM vis-a-vis 80-20 condition was also questionable as to why 20% should at all be allowed to be purchased from unregistered dealers. Such a provision would be grossly misused by obtaining labour, sandstone, chips, etc. from unregistered dealers which were by themselves evasion prone. Similarly, if the Capital Goods were not to be included in 80-20 calculation, the tendency would be to lease them rather than to buy them so as not to bring them into books of account. The proposal that in case the inputs were procured from a non-existent dealer, recovery would be made, was also questionable as to whether the proposal was promoting hawala and rent seeking behavior of officers would also come into picture. Similarly, the proposal regarding lapse of lTC could be circumvented by adopting ways to utilize the JTC for other goods and services. Summing up his arguments, he urged the Council to necessar....
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....r-IT city carried the same price. The Hon'ble Minister from Madhya Pradesh stated that they were different in terms of cost; a 60 sqm flat in Cuffe Parade in Mumbai would cost more than a Rs. 1 crore whereas a flat of same size in Bhopal would cost around Rs. 25 lakh. The Hon'ble Chairperson observed that in such a situation, without a value limit, definition of Affordable House would be incomparable from city to city and prone to misuse. The Hon'ble Minister from Kerala stated that apart from the things discussed so far, he also had a serious difference with the proposition that there should be a GoM for recommending as to whether to bring land into GST and did not support the same. In his opinion, the States were not left with any revenue generating resources after the introduction of GST and in absence of that, the States had to explore areas to generate additional revenue like increasing registration charges on motor vehicles. He thus opined that the Council should evaluate the experience of GST before bringing any new items under GST. After GST, some flexibility was required so that State could realise resources during emergency requirements. Further, as regards the condit....
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....it would be injustice to the poor and hence he proposed that MIG-I and MIG-II houses be kept at the tax rate of 3%. As regards the remaining houses under non-affordable housing, 5% tax rate needed to be discussed and debated in the Council. Further, under indirect tax, people in rural areas and tier-Il cities as well as urban areas pay the same rate of tax. However, people living in metro areas got far more facilities in terms of infrastructure and governmental support, and hence the tax rate in tier-II/III cities should be lower as compared to metro areas where rate could be upto 8% to maintain an equilibrium. The transitional provisions seemed to be complicated and needed to be simplified. Further, regarding TDR, he stated that it needed to be discussed in detail since of late, States' rights were being taken away one by one by the Centre and if the States' rights associated with the taxation on land were also taken away, they would lose revenue from registration. Therefore, he favoured constitution of a GoM to discuss the transitional issues as well as issues relating to TDR/JDA, etc. 25.15. The Hon'ble Deputy Chief Minister of Delhi stated that the current meetin....
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....x rate for the Affordable Houses. GoM had recommended a tax rate of 5% and 3% for non-affordable and affordable segments respectively whereas the Fitment Committee had recommended that 5% and 1% respectively were the appropriate revenue neutral rate. NBCC and CPWD data supported the above conclusion and in the last meeting also, it was submitted by the Hon'ble Minister from Chhattisgarh that 3% tax rate in the affordable segment would push up the prices. 25.17. The Hon'ble Minister from Chhattisgarh stated that he had submitted in the last meeting that tax rate of 3% without ITC in Affordable segment would push up prices and that 1% rate was closest to the revenue neutral rate. This seemed to be confirmed from the data as analyzed by the Fitment Committee. The Hon'ble Minister from West Bengal stated that the presented data also showed that for premium housing, the revenue neutral rate seemed 7% to 8%. The Hon'ble Deputy Chief Minister of Delhi stated that as per the prevailing situation, there were more than 5 lakh houses ready, but could not be sold and hence, there was no doubt that the Sector required a push. However, the Council was going for a long-term decisio....
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....GoM on Real Estate. He stated that tax rate of 5% without ITC for non-Affordable Housing was agreeable. Further, GoM had recommended 3% or lower GST without ITC for Affordable category which the Fitment Committee had suggested to be kept at 1%. In his opinion, in the current meeting, the Council should decide primarily on tax rates and definition of Affordable Housing. He added that the reason for such a suggestion was that this important industry had come to a grinding halt leading to unemployment. The medium and low segment builders were all suffering and were on the verge of closure whereas the big builders were surviving as they knew how to survive when the cash flow was low. He again pleaded that ancillary issues relating to taxation of TDR/JDA and transition issues, etc. be discussed later. Further, consideration of Agenda should not be linked to elections but should be considered as a requirement of the industry. The most important thing to be noticed by the Council Members in the proposal was that there was no interference with the taxation powers of the land and rather the Council could discuss when to bring the land under GST at a later date. In the end, he appealed that ....
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....ominal while the impact of GST on affordable houses in Low Rise Buildings (taxable@ 3%) was making cost higher by 7.6%. 25.22. He further stated that the conclusion that could be drawn from the above slide was that the above proposition of tax of 5% without ITC and 3% without ITC was not equitable. It raised a question as to who was being taxed under 'Affordable Housing' . He added that in Affordable Housing such as PMAY, RAY and other schemes, the Government was either giving money for building in the villages or giving interest subsidy and wondered whether with this 3% tax, the Council wanted to tax the Government and take the money back instead of supporting the poor. Further, in his opinion, the criteria to define the 'Affordable Housing' should take into account both area and value. As far as land was concerned, he considered it to be totally non-negotiable and taxation of land should not be touched at all. 25.23. Shri Sudhir Mungantiwar, Hon'ble Minister from Maharashtra stated that he agreed with the proposal to tax Affordable houses at 1% and non-affordable houses at the rate of 5% without ITC. He proposed inclusion of Mumbai Metropolitan Region (M....
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....tion of India, Income Tax Act and the Finance Act, 1994 (Service Tax - now superseded by GST). As per the Entry 49 of List-ll of the Constitution, tax on land and associated revenue should accrue to the States which the States had been exercising for decades. Under Income Tax Act, a dispute arose as to whether long term leasing was liable to TDS deduction under Section 194 I of the Income Tax Act which was answered by judicial fora that transactions of long-term leasing was a deemed sale and hence was not liable to TDS. Thus, the Constitution as well as the Income Tax Act considered the long-term lease as a deemed sale. 25.27. He further stated that as regards the treatment of long-term lease under Service Tax, tax on leasing of vacant land or agricultural land was exempted from Service Tax. Entry 97 of the Schedule III of the Constitution under which Service Tax Act was enacted, was interpreted to provide that if anything was not liable to tax out of any Entry in the List-II, then tax could be levied under Service Tax. The Judicial fora had upheld that for certain aspects regarding land, it could be treated as land while some other aspects could be treated as service and hence ....
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....nd in a limited manner by way of exempting TDR/JDA, etc. as long as it was supplied as input to residential houses under construction. Further, when completed house was sold after issue of completion certificate, these rights would become taxable with the upper ceiling of tax limited to the tax applicable to that segment of housing. Thus, the situation of multiple taxation of the transactions during the construction of house got resolved to the extent it was before the Fitment Committee. The Secretary further explained that as far as taxation of commercial lease was concerned, the same was not being affected by the current proposal inasmuch as the leasing of land for construction of residential houses was getting taxed in both situations, i.e. prior to as well as after this proposal. The only difference that had come was that lTC was not available in the current proposal. 25.29. Shri Himanta Biswa Sarma, Hon'ble Minister from Assam stated that it was correct that the Council had approved to tax under-construction properties at the rate of 12% and 8% for non-affordable and 'Affordable Houses' respectively. Thus, the issue whether land was a State subject or not should....
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....d area up to 60 sqm which would be approximately 800 sq ft whereas in non-metro areas, the covered area requirement could be up to 90 sqm which would be around 900 sq ft and could be 3-bedroom or a 2-bedroom house. In both cases, value limit could be either Rs. 40 lakh or Rs. 50 lakh as it would take care of future inflation also. 25.31. The Hon'ble Minister from Chhattisgarh stated that tax on Housing under Prime Minister A was Yojana should be completely exempted or some threshold limit should be worked out below which exemption should be available. Secretary explained that PMA Y covered the houses up to 160 to 200 sqm which were proposed to be left out of the definition of ' Affordable Housing'. He further stated that in some 'Affordable Houses', both individual and the Government contributed, while in some cases, the whole house itself was constructed by the Government and in such cases, there should not be any tax. The Hon'ble Chairperson explained that the Hon'ble Minister from Chhattisgarh had proposed a tax rate of zero whereas in a situation where zero per cent tax rate was kept, the benefit of Input Tax Credit would not be available. The Hon'....
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....nquiries from the persons involved in the sector. Thus, the tax rate of 5% and 1% without lTC would be revenue neutral in the current situation. The Hon'ble Minister from Tamil Nadu stated that their State agreed to the resolution of the Council on the taxation of Affordable and non-Affordable houses. 25.34. The Hon'ble Chairperson enquired whether it could be taken that there was broad consensus in the Council for tax rate of 5% without ITC for non-Affordable Housing and 1% without ITC for Affordable Housing for residential houses under construction and whether value limit could be taken as Rs. 60 lakh in metro areas and include Mumbai Metropolitan Area and Delhi NCR in the definition. The Hon'ble Minister from Chhattisgarh requested that he would still request that there should be some Housing schemes which should be exempted from GST altogether such as houses up to the value of Rs. 30 lakh. The Hon'ble Chairperson stated that the Members in the Council had often discussed the issues at length and come to a conclusion by stepping back from their stated official position to arrive at a consensus in the interest of common people. He suggested to observe how the decis....
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.... The Hon'ble Chairperson asked JS TRU-ll to explain the proposal on TDR once again. JS TRU-ll explained that the proposal on TDR was that it was to remain exempt during the sale of houses under construction, i.e. houses which were sold before completion. After the completion certificate was issued, the tax on TDR would be payable on the sale of flat and the tax rate would be applicable to the same class of houses, i.e. non-affordable or affordable to which it belonged. The Hon'ble Chairperson suggested that since most of the members would be busy with elections and there were some procedural issues to be sorted out relating to TDR, appointment and reversal of credit, Council might mandate the Fitment Committee and the Law Committee to meet jointly and prepare the Notifications and Circulars covering all aspects. States, who were not members of the Fitment Committee or the Law Committee might send their representative officers to join the meeting. By around 10^th of March 2019, the Fitment and the Law Committee should prepare draft notifications and circulars detailing all the guidelines. The Hon'ble Chairperson also directed that the point raised by the Hon'ble Mini....
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....x on TDR/ IDA/ long term lease (premium)/ FSI etc. shall be payable at the rate applicable to that segment i.e. affordable or other than affordable category. f. The Fitment Committee and the Law Committee to meet jointly and prepare the Notifications and Circulars covering all aspects including the abatement, apportionment and reversal of Input Tax Credit, Transitional provisions, taxation of development rights etc., which should then be approved by the GST Council. Agenda Item 7: Any other agenda item with the permission of the Chairperson (i) Interim report of GoM on Lottery 27. The Hon'ble Chairperson invited Members to commence discussion on this Agenda item. The Hon'ble Minister from Kerala, starting the discussion, questioned as to why this issue needed to be taken up now. He observed that the outcome of discussion in Real Estate sector was much better in this meeting as compared to Video Conferencing due to the constructive participation of the Members. The question was why there should be a tearing hurry to take a decision on this issue as national economy was not getting affected due to lack of decision on this issue. He added that the Report of GoM o....
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.... was a member of the GoM and though the issues were elaborately discussed there, he felt that a little more time was needed to discuss the issues further. He observed that even though the revenues could get affected, so far, the decisions in the Council had been taken in the spirit of federalism and he would not like to see the Hon'ble Minister from Kerala unhappy on account of decision on this issue. He added that the Council was only discussing the issue with a view of rationalizing tax rate on Lottery to one particular rate. He observed that timing perhaps might not be right to take a decision on this issue. He further stated that he would agree to defer the issue provided other similar issues like on-line gambling, casinos, etc. which were relevant for States like Goa and Sikkim also became part of the terms of reference of the GoM on Lottery as these too involved issues of multiple taxation. These should also be discussed in the GoM and then brought before the Council. 27.3. The Hon'ble Minister from Punjab stated that he could not attend the last meeting of the GoM due to his commitments regarding the Budget presentation in the State Assembly. He stated that there was ....
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....y of Kerala (State-organized) should be taxed at the rate of 12% whereas lottery of North-Eastern States (State-authorised) should be taxed at the rate of 28% when it was run as per the prescribed guidelines by the Union Ministry of Home Affairs. He stated that any type of discriminatory tax rate should be removed. He further stated that even if the matter was deferred today, eventually there was a need to arrive at a just solution on this issue and the rate of tax would need to be made uniform, be it 12%, 18% or 28%. He added that discriminatory rate of tax should not be persisted with. He reiterated that the Union Home Ministry had allowed lottery to be run through authorized representatives and they were running the lottery as per those guidelines. 27.7. The Hon'ble Chairperson enquired whether inter-State sale of lottery could be prohibited. The Hon'ble Minister from Kerala stated that prior to GST regime, in his State there was a tax on paper lottery under the Paper Lotteries Act and they had made stringent law by legislation under the Gambling Act because of which, for eight years, no outside lottery could be run in the State of Kerala. 27.8. The Hon'ble Ministe....
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.... viewpoints on the issue of rate of tax on Lottery. One viewpoint was represented by the State of Kerala which wanted to continue with the differential rate of tax for Lottery run by State and Lottery authorized by State. The other competing view was of the North-Eastern States which had stated that because of lack of governmental infrastructure to run lottery across the country, they had authorized agents to run the lottery and the 16% difference in the two rates was affecting sale of their lotteries. 27.11. The Hon'ble Minister from West Bengal stated that their State had only paper Lottery which was taxed at the rate of 12% and even though the sale of West Bengal run Lottery had grown, the revenue was miniscule as compared to revenue from the Lottery run by other States. The Hon'ble Chairperson observed that it appeared from page number 9 of the Agenda note that the revenue of West Bengal would go up if rate of tax for all Lotteries was made 28%. He wondered why the GST revenue of the North-Eastern States from Lottery was so little when their Lottery was selling so much. In this context, he stated that the data needed to be re-verified and it could also be discussed i....
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.... the revenue accrued from it went for public use. However, there were provisions in the law to ensure that it should not become an addiction. He added that if a State sub-contracted lottery to profit making middlemen who sometimes circumvented provisions of law, then it took away the benefit of revenue from lottery. He stated that earlier, they had several times appealed to the Central Government to frame laws under the Gambling Act to prevent outsiders from running the lottery. Shri H. Rajesh Prasad, Commissioner, State Tax, Delhi stated that the Hon'ble Supreme Court had given a judgement that banning Lottery in a State which was itself running Lottery would be a violation of Article 301 of the Constitution relating to freedom of trade and commerce. 27.15. The Hon'ble Minister from Assam reiterated that it was not tenable to fix the rate of lottery on the basis of who was running the Lottery. He stated that it was insulting for the North-Eastern States when there was reference to middlemen, etc. as they were running the lottery as per the law and after the scrutiny of the Courts of Law. He stated that what was being referred to as middlemen were actually the dealers and ag....
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.... He clarified that he was not against the States who authorized to run Lottery but he was against those who actually ran those Lotteries. 27.18. The Hon'ble Minister from Jharkhand enquired as to in which of the States lottery was being run. The Hon'ble Chairperson stated that this was indicated in paragraph 9 of the Agenda note on this subject. The Hon'ble Chairperson requested the Hon'ble Deputy Chief Minister of Gujarat and the Hon'ble Minister from Punjab to suggest a further roadmap on this issue. 27.19. The Hon'ble Minister from Punjab suggested that the issue could be referred back to the GoM or a reference could be made to the Attorney General of India or the decisions of the Hon'ble High Court of Kolkata could be taken up to Hon'ble Supreme Court for review. The Hon'ble Chairperson stated that in his view, the issue was not about the legality; rather the North-Eastern States appointed agents due to lack of Governmental infrastructure to sell lottery across the country and the Hon'ble Minister from Kerala held a view that differential rate of tax was justified as one was earned by the State whereas the other was earned by the private parties. The Hon'ble D....
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....etc. 29.2. The Hon'ble Minister from West Bengal raised the issue of inverted tax structure in the railway Sector which needed to be addressed as there was a lot of accumulated credit while the refund of credit was blocked. The petro chemical sector was also suffering from a similar problem. Agenda Item 8: Date of the next meeting of the GST Council 30. The Hon'ble Chairperson stated that the next meeting of the Council would be held through video conference to consider the recommendations of the Fitment Committee and the Law Committee on the various outstanding issues relating to Real Estate. He said that tentatively it would be held on 15^th or 17^th March 2019 for which intimation would be sent in due course. 31. The meeting ended with a vote of thanks to the Chair. ============= Document 1 MINUTE BOOK SI Annexure 1 List of Hon'ble Ministers who attended the 33rd GST Council Meeting on 20th February 2019 Name of Hon'ble Minister Charge Union Finance Minister CHAIRMAN'S INITIALS Shri T.S. Singh Deo Shri Manish Sisodia Shri Mauvin Godinho No State/Centre 1 Govt of India Shri Arun Jaitley 2 Govt of Ind....
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.... Shri Arun Jaitley Dr. Himanta Biswa Sarma Shri Sushil Kumar Modi Shri T.S. Singh Deo Shri Manish Sisodia Shri Mauvin Godinho Shri Nitinbhai Patel No State/Centre 1 Govt of India 2 Assam 3 Bihar 4 Chattisgarh 5 Delhi 6 Goa 7 Gujarat 8 Haryana 9 Himachal Pradesh 10 Jammu & Kashmir 11 Jharkhand Shri C.P. Singh 12 Kerala 13 Madhya Pradesh 14 Maharashtra 15 Manipur 16 Meghalaya 17 Puducherry 18 Punjab Dr. Banwari Lal Shri Mahender Singh Thakur Shri K. K. Sharma Dr. Thomas T M Isaac Shri Priyavrat Singh Shri Sudhir Mungantiwar Shri Thokchom Radheshyam Singh Shri Conrad K. Sangma Shri V. Narayanasamy Shri Manpreet Singh Badal 19 Rajasthan Shri Shanti Kumar Dhariwal 20 Tamil Nadu 21 Tripura 22 Uttar Pradesh 23 24 Uttarakhand West Bengal Shri D. Jayakumar Ms. Santana Chakma Shri Rajesh Agarwal Shri Prakash Pant Dr. Amit Mitra Charge Union Finance Minister Finance Minister Deputy Chief Minister Minister for Commercial Taxes Deputy Chief Minister Minister for Panchayat Deputy Chief Minist....
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.... Shri G. S. Sinha Shri Jagmohan Shri Arjun Meena Charge Revenue Secretary Chief Economic Adviser Chairman, CBIC Member (Budget), CBIC Special Secretary, GST Council Pr. CCA Adviser (GST), CBIC Member, CBIC Pr. Commissioner (GST), CBIC Pr. ADG, GST, CBIC Joint Secretary, TRU I, DOR Joint Secretary, TRU II, DOR ADG, GST, CBIC DG (M&C) ADG (M&C) Deputy Secretary, DoR Deputy Secretary, TRU-II, DOR Joint Comm., GST Policy Wing, CBIC Joint Comm., GST Policy Wing, CBIC Dy. Comm., GST Policy Wing, CBIC Technical Officer, TRU-II, DOR Asst. Comm., GST Policy Wing, CBIC OSD, TRU-II, DOR OSD to Union Minister OSD to MoS (Finance) PS to MoS Media Advisor to RS Adviser, CBIC Joint Secretary Joint Secretary Director Director Director Under Secretary 35 GST Council Shri Rakesh Agarwal Under Secretary 36 GST Council Shri Rahul Raja Under Secretary CHAIRMAN'S 37 GST Council Shri Mahesh Singarapu Under Secretary INITIALS 38 GST Council Shri Debashish Dutta Under Secretary Page 40 of 64 JAYNA BOOK DEPOT MINUTE BOOK 39 Est....
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....ional Secretary, State Tax Special Commissioner, State Tax Additional Commissioner, State Tax Joint Commissioner, State Tax Joint Commissioner, State Tax Secretary cum Commissioner, State Tax Joint Commissioner, State Tax Cy CHAIRMAN'S INITIALS Page 41 of 64 CHAIRMAN'S INITIALS MINUTE BOOK 75 Chhattisgarh 76 Chhattisgarh 77 Chhattisgarh 78 Delhi 82 Delhi 83 Goa Shri Deepak Giri Shri Manish Mishra Shri Narendra Verma Ms. Renu Sharma Shri H. Rajesh Prasad Shri Sanjeev Kumar 79 Delhi 80 Delhi Shri Rajesh Goyal 81 Delhi Shri A K Singh Shri L S Yadav Shri Dipak Bandekar 84 Gujarat Shri Arvind Agarwal 85 Gujarat Dr. P.D. Vaghela 86 Gujarat 87 Gujarat 88 Haryana 89 Haryana 90 Himachal Pradesh Himachal 91 Pradesh Himachal Pradesh 22 92 93 93 Jammu & Kashmir 94 Jharkhand 95 Jharkhand Shri Ajay Kumar Shri Sanjeev Kaushal Shri Vijay Singh Shri Jagadish Chander Sharma Shri Rajeev Sharma Shri Rakesh Sharma Shri P K Bhatt Shri Prashant Kumar Shri Ajay Kumar Sinha Ms. Tinku Biswal 96 Jharkhand....
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.... Shri Pawan Garg Dr. Prithvi Raj Shri Preetam b. Yaswant Ms Meenal Bhosle 125 Punjab 126 Rajasthan 127 Rajasthan 128 Rajasthan 129 Rajasthan 130 Rajasthan 131 Sikkim Shri Ketan Sharma 132 Tamil Nadu 133 Tamil Nadu 134 Tamil Nadu 135 Tamil Nadu 136 Telangana 137 Telangana 138 Telangana 139 Telangana 140 Tripura 141 Tripura 142 Uttar Pradesh 143 Uttar Pradesh 144 Uttar Pradesh 145 Uttar Pradesh 146 Uttar Pradesh 147 Uttar Pradesh 148 Uttar Pradesh 149 Uttarakhand 150 Uttarakhand 151 152 West Bengal 153 West Bengal West Bengal 154 Uttarakhand Shri Arvind Mehta Smt. Dipa Basnet Shri Ka. Balachandran Dr. T.V Somanathan Shri K Gnanasekaran Shri C. Palani Shri Somesh Kumar Shri Anil Kumar Shri Laxminarayan Jannu Shri U Srinivasulu Shri Nagesh Kumar B Shri Ashin Barman Shri Alok Sinha Ms Amrita Soni Shri Vivek Kumar Shri C P Mishra Shri DK Sachan Shri Sanjay Kumar Pathak Shri Brijesh Mishra Shri Piyush Kumar Assistant Commissioner, State Tax Addl. Commr, State Tax Joint Commissioner, State Tax Joint Commissio....
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....ncil 37 GST Council 38 GST Council 39 GST Council 40 GST Council 41 GST Council 42 GST Council GST Council Dr. Rajeev Ranjan Shri Sandeep M. Bhatnagar Shri J. P. S. Chawla Shri P.K. Mohanty Shri Ritvik Pandey Shri Manish Kumar Sinha Shri Yogendra Garg Shri S. K. Rehman Shri D. S. Malik Shri Rajesh Malhotra Shri Kush Mohan Nahar Shri N. Gandhi Kumar Shri Pramod Kumar Shri Parmod Kumar Shri Amaresh Kumar Shri Ravneet Khurana Shri Kumar Asim Anand | Shri Harsh Singh Shri Harish Y. N Shri Paras Sankhla Shri Debashis Chakraborty Shri Abhishek Gupta Dr. Vikash Shukla Shri Nagendra Goel Shri Shashank Priya Shri Dheeraj Rastogi Shri Rajesh Agarwal Shri G. S. Sinha Shri Jagmohan Shri Arjun Meena Shri Rakesh Agarwal Shri Rahul Raja Shri Mahesh Singarapu Shri Debashish Dutta Shri Umed Singh Rawat Shri Sandeep Bhutani Shri Mukesh Gaur Shri Vipul Sharma Shri Amit Soni Revenue Secretary Chairman, CBIC Member (Budget), CBIC Special Secretary, GST Council Member, CBIC Pr. CCA, CBIC Adviser (GST), CBIC Pr. Commissioner (GST), CBIC ....
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.... CBIC Commissioner, Ranchi Zone, CBIC Chief Commissioner, State Tax Commissioner, State Tax Commissioner, State Tax Joint Commissioner, State Tax Additional Secretary, State Tax Shri Rakesh Kumar Popli Addl. Comm. Cum Collector, E&T Shri R K Choudhary Ms. Reena B. Kangale Shri S. L. Agarwal Ms. Renu Sharma Shri H. Rajesh Prasad Shri Rajesh Goyal Shri Dipak Bandekar Shri Arvind Agarwal Dr. P.D. Vaghela Shri Ridhidesh Rawal Shri Sanjeev Kaushal Shri Vijay Kumar Singh Shri Rajeev Sharma Shri Rakesh Sharma Shri P K Bhatt Shri Ajay Kumar Sinha Shri Brajesh Kumar Shri Srikar M.S. Ms. Tinku Biswal Asst. Comm., E & T Secretary cum Commissioner, State Tax Special Commissioner, State Tax Pr. Secretary, Finance Commissioner, State Tax Addl. Commissioner (Policy), State Tax Commissioner, State Tax ACS, Finance Chief Commissioner, State Tax Dy. Commissioner, State Tax Addl Chief Secretary, E & T Dept Addl Commissioner, State Tax Commissioner, State Tax and Excise Joint Commissioner, State Tax & Excise Commissioner, State Tax Addl. Commissioner, State Tax State Tax ....
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....3rd Meeting of GST Council Deemed ratification & Issues for consideration Agenda • INATION TAX MARKET Agenda No. 2 Deemed Ratification of Notification / Circulars issued post 32nd Meeting of GST Council • Agenda No. 3 - Decisions taken by the GIC post 32nd Meeting of GST Council • Agenda No. 4 - Decisions / recommendations of the IT Grievance Redressal Committee for information of the GST Council Page 47 of 64 2 an CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda No. 2 Deemed Ratification (1/2) • INATION TAX MARKET Ratification of following notifications, circulars & orders issued post 32nd meeting (dated 10th January, 2019) of GST Council: Act/Rules CGST Act/CGST Rules IGST Act Type Central Tax Central Tax (Rate) Integrated Tax Integrated Tax (Rate) Union territory tax Notification/ Circular / Order Nos. 1 to 8 of 2019 1 of 2019 1 to 3 of 2019 1 to 2 of 2019 1 of 2019 UTGST Act Union territory tax (Rate) 1 of 2019 Agenda No. 2 Deemed Ratification (2/2) NATION TAX MARKET â....
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.... Clarification regarding mis-match of data reported in Table 3.2 of FORM GSTR-3B & in Table 7B of FORM GSTR-1 ✓Circular 89/08/2019-GST dated 18th February, 2019 issued . Clarification regarding compliance of rule 46(n) of the CGST Rules while issuing invoices in case of inter- State supply ✓Circular 90/09/2019-GST dated 18th February, 2019 issued Page 50 of 64 MINUTE BOOK Estd. 1949 JB JAYNA Agenda No. 3 GIC decisions post 32nd GST Council Meeting (5/5) Decision of 24th GIC (12.02.2019) INATION TAX MARKET • Clarification regarding tax payment made for supply of warehoused goods while being deposited in a customs bonded warehouse for the period July, 2017 to March, 2018 ✓Circular 91/10/2019-GST dated 18th February, 2019 issued • Amendment to question No. 61 of the SOP on TDS ✓ Amended SOP issued on 18th February, 2019 Approval of the amended AOA (Articles of Association) and MOA (Memorandum of Association) of GSTN ✓ Amended AOA (Articles of Association) and MOA (Memorandum of Association) of GSTN approved Agenda No. 4 Decisions/recommendations ....
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....ined by GSTN and will be presented to the IT-GRC for decision shortly Rest of the cases are under investigation and checking of logs in the system 12 Page 52 of 64 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Annexure 6 REAL ESTATE Agenda Item 5 33rd GST Council Meeting 24th February, 2019 Scheme of Presentation 1. Introduction 2. GST Rate Structure 3. Affordable Housing 4. Eligibility Criteria for Affordable Housing 5. Safeguard Measure - RCM on purchase below 80% 6. TDR/FSI Related Issues 7. Credit Apportionment 8. Principles for Transition 9. Option or Mandatory 10. Other Issues Page 53 of 64 an CHAIRMAN'S INITIALS an CHAIRMAN'S INITIALS MINUTE BOOK Recommendation of GoM on Real Estate •Effective GST @ 5% without ITC for non- affordable residential properties, and • Effective GST @ 3% or less without ITC for affordable residential properties may be levied. Recommendation of GoM on Affordable Housing •Definition of affordable housing may be revised which inter alia include - oThe existing schemes of State and Central Government cov....
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....9 6 Percentage GST 4.99% 7.05% 0.00% 4.30% 0.76% Payable Page 56 of 64 Source: NBCC JAYNA BOOK DEPOT Estd. 1949 JB JAYNA MINUTE BOOK Current scope of "affordable housing" Affordable housing PMAY Single residential units Erstwhile schemes of JNNURM/RAY Low-cost houses (upto 60 sqm) Affordable Housing in Partnership (60 sqm) In-situ redevelopment of existing slums using Credit Linked Subsidy Scheme EWS: 30 sqm LIG: 60 sqm MIG I: 160 sqm Beneficiary led individual house MIG II: 200 sqm* Having infrastructure status Any housing scheme of a State government GST Rate Structure • Effective GST @ 5% without ITC for non- affordable residential properties, and Effective GST @ 3% or less without ITC for affordable residential properties may be levied. •FITCOM's View: Regarding affordable residential properties many officers felt that rate of 3% appears to be higher and effective rate of 1% without ITC would be appropriate. Page 57 of 64 10 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Affordable Housing ....
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....ommittee was of the view that the proposal may be simplified by shifting tax liability on all purchases from unregistered persons on the developers under RCM at the merit rate of each purchase.) Page 59 of 64 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Principles for Transition ⚫ ITC shall be available only to the extent (calculated on pro- rata basis) of the value of the supply made out of the total value of supply for the project till the date of transition. ITC taken less vis-à -vis the supply made shall be quantified and can be used to adjust the future tax liability. • ITC taken in excess of supply made (calculated on pro-rata basis) shall be recovered. Principles for Transition contd.. • The ITC with respect to work in progress and inputs lying in stock shall lapse. The ITC balance lying in the ledger after paying the liability relating to supplies made prior to the date of transition shall lapse. •Credit pertaining to Capital Goods shall be distributed between residential and commercial property on pro-rata basis. Life cycle of capital goods shall be considered 60 m....
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....x (Rs 20 lacs x 6) = Rs 6 lacs ⚫ Therefore, the withdrawal of exemption shall be done of Rs 6 lacs in both the cases and not Rs 10.8 lacs. TDR/FSI Related Issues... ⚫Liability to pay GST on TDR etc may be placed on the recipient under RCM. •Further the withdrawal may be limited to 5% (1% in case of affordable) of value of unsold property. • Value of supply of service by way of transfer of development rights in case of barter is equal to value of similar dwelling or commercial units charged by the builder/developer Page 62 of 64 15 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 B JAYNA Credit Apportionment •Apportionment between residential and commercial project • It shall be done on self assessment basis by the developer. The same shall be subject to audit and intelligence based enforcement. Guidelines to apportion the purchases between residential and commercial projects are as under: Purchases exclusively for commercial property may be apportioned to commercial projects. • Purchases exclusively for residential property may be apportioned to residential....