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Home Case Index All Cases GST GST + AAR GST - 2023 (1) TMI AAR This

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2023 (1) TMI 87 - AAR - GST


Issues Involved:
1. Classification of the project as a Residential Real Estate Project (RREP) or Real Estate Project (REP).
2. Applicability of GST rates on different types of apartments and commercial units within the project.

Issue-wise Detailed Analysis:

1. Classification of the Project as RREP or REP:
The applicant, engaged in the construction and development of a real estate project named "Shivvay Landmark," sought to determine whether their project qualifies as a Residential Real Estate Project (RREP) or a Real Estate Project (REP). According to Notification No. 3/2019-CT (Rate), a project can be classified as an RREP if the carpet area of commercial apartments is not more than 15% of the total carpet area. The applicant submitted that the total carpet area of the project is 7406.99 square meters, with commercial shops occupying 776.59 square meters, which is 10.49% of the total carpet area. Consequently, the project qualifies as an RREP since the commercial area is less than 15% of the total carpet area.

2. Applicability of GST Rates:
The applicant sought clarification on the applicable GST rates for different types of units within the project, specifically affordable residential apartments, non-affordable residential apartments, and commercial shops.

Affordable Residential Apartments:
The applicant argued that affordable residential apartments, defined as having a carpet area below 90 square meters and a cost below Rs. 45 lakh, should attract a GST rate of 1% without Input Tax Credit (ITC). The conditions for this classification include:
- Construction in a non-metropolitan area.
- Carpet area below 90 square meters.
- Commercial area not exceeding 15% of the total carpet area.
- Consideration charged below Rs. 45 lakh.

Non-affordable Residential Apartments and Commercial Shops:
For non-affordable residential apartments and commercial shops, the applicant contended that the applicable GST rate should be 5% without ITC. The conditions for this classification include:
- No ITC on goods and services used in supplying the service.
- Payment of an amount equivalent to the ITC attributable to construction in a project after 1st April 2019.
- At least 80% of input and input services should be received from registered suppliers.
- Tax on shortfall of input and input services from unregistered suppliers should be paid at 18% on a reverse charge basis.
- Tax on cement received from unregistered suppliers should be paid on a reverse charge basis.
- Maintenance of project-wise accounts of inward supplies and submission of tax liability on shortfall.

Findings:
The authority examined the submissions and found that the applicant did not provide sufficient legal documents to establish the exact carpet area and consideration charged for affordable residential apartments, non-affordable residential apartments, and commercial shops. The applicant also did not demonstrate compliance with the conditions mentioned in Notification No. 11/2017-CT (Rate) as amended by Notification No. 3/2019-CT (Rate).

Ruling:
Due to the lack of proper documentation and evidence, the authority could not pronounce a ruling on the questions sought by the applicant. The application was deemed not maintainable in the absence of sufficient documents to support the claims.

 

 

 

 

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