TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 300
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....ake it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be involved in construction of property used for residential purpose. 1.3 Presently, the applicant is constructing a property at Ghosh Hat, Madhaitala, P.S. & P.O. Katwa under Katwa Municipality, District-Purba Bardhaman, West Bengal. 1.4 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01: (i) Whether the property currently under construction is a Residential Real Estate Project (RREP) as defined under No....
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.... least 80% of the inputs and input services have been purchased from registered persons only. 2.2 The applicant has submitted that as per Notification No. 11/2017- Central Tax (Rate) dated the 28th June, 2017 as amended vide Notification No. 03/2019- Central Tax (Rate) dated the 29th March, 2019 [corresponding West Bengal State Notification No.1135-F.T. dated 28.06.2019 as amended vide Notification No. 552-F.T. dated 29.03.2019 and herein after collectively referred to as, the relevant Notification],affordable residential apartment under GST is a residential apartment in a project which commences on or after 01-04-2019 or in an ongoing project in respect of which the promoter has opted for new rate of 1%(effective from 01-04-2019) having carpet area upto 60 square meter in metropolitan cities and 90 square meter in cities or towns other than metropolitan cities and the gross amount charged for which, by the builder is not more than 45 lakhs rupees.[Cities or towns in the notification shall include all areas other than metropolitan city as defined, such as villages.]. Further, "Residential Real Estate Project (RREP)" shall mean a REP in which the carpet area of the commercial apart....
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....urrently under construction of Kayal Infra can only be treated as a Residential Real Estate Project (RREP) if the same satisfies the above definitions. It appears that if the disclosures in Para 15 of the GST ARA-01 made by the applicant are true and correct, including the disclosure that the carpet area of the commercial apartments in the project is zero per cent, the same should be treated as a Residential Real Estate Project (RREP). 3.3 Question No.2: Whether the said property under construction is an affordable residential apartment as defined in the relevant Notification? Comments: The definition of affordable residential apartment is given in the relevant Notification as: 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 othe....
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....% of SGST), as further reduced by 1/3rd to factor in the value of land? Comments: From the disclosures in Para 15 of the GST ARA-01 made by the applicant it appears that the project under consideration is an Affordable Residential Apartment coming up in a non-metro area with apartment units each having carpet area not exceeding 90 sq meters, and value not exceeding Rs. 45 lakh. It is not clear from the application whether the project involves transfer of property in land or undivided share of land. It is also not expressly mentioned whether the applicant is undertaking the project as a 'promoter' as defined in clause (zk) of Section 2 of the Real Estate (Regulation and Development) Act, 2016 or not; however, it is assumed to be so. In such a scenario, as a construction project of affordable residential apartments in an RREP commencing after 01.04.2019, where the promoter is not availing any input tax credit, the rate of tax should be 0.75% of CGST and 0.75% of SGST, the total being 1.5% on the value of supply of service and goods, in terms of the relevant Notification. In the event of the applicant being a developer-promoter also transferring the land share rights, the value of s....
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....t, therefore, can be termed as a 'real estate project'. Further, a REP shall be treated as RREP if the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP. Here, from the submitted documents, we find that the instant project doesn't have any commercial apartment. As a result, the instant project falls under the category of RREP. 4.7 Now we proceed to decide whether the apartments in the project can be regarded as 'affordable residential apartment' or not. The applicant has contended that the apartments shall be treated as affordable residential apartment since it fulfils following criteria: (I) construction of the said project is in a non- metropolitan area; (II) carpet area is below 90 Sqm of all the flats; (III) the carpet area of the commercial areas is also not more than 15 percent; and (IV) the consideration being charged from customers is below 45 lakh 4.8 The Commissioner of State Tax, West Bengal vide order No. 04/WBGST/PRO/2019 dated 12.04.2019 has prescribed that the metropolitan city of Kolkata as referred to in item (a) to clause (xvi) of Paragraph 4 of Notification No. 1135-F.T. date....
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....y shall be deemed to be one third of the total amount charged for such supply. Explanation. - For the purposes of paragraph 2, "total amount" means the sum total of, - (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be. 4.11 The aforesaid notification has been amended from time to time. As per item number (i) and (ic) against Sl.No.3 of the relevant Notification, the Central Tax rate of 0.75% (effective tax rate being 0.5% without ITC) is applicable for the following: * Construction of affordable residential apartments by a promoter in a Residential Real Estate Project (herein after referred to as RREP) which commences on or after 1st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein, 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 o....
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....ificate, where required, by the competent authority or after its first occupation, whichever is earlier. * Construction of residential apartments other than affordable residential apartments by a promoter in a REP other than a RREP which commences on or after 1 st April, 2019 or in an ongoing REP other than RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein, 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, whichever is earlier. 4.14 The aforesaid entries thus prescribe that a promoter shall pay tax @7.5% w.e.f. 01.04.2019 (effective rate of 5% after allowing 1/3rd abatement for land) on intra-state supply of: * Construction of residential apartments other than affordable residential apartments in a RREP which commences on or after 1st April, 2019; or * Construction of residential apartments other than affordable residential apartments in an ....
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....es shall be in accordance with the option to be exercised.; # The date has been extended to 20th of May, 2019 vide Notification No. 10/2019-Central Tax (Rate) dated 10.05.2019 [ West Bengal State Notification No. 771 F.T. dated 10.05.2019 (if) Construction of a complex, building, civil structure or a part thereof, including, - (i) commercial apartments (shops, offices, godowns etc.) by a promoter in a REP other than RREP, (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, 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) ....