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2020 (1) TMI 789 - AAR - GSTConcessional rate of tax / GST - building completion and finishing services - Affordable Housing Project (AHP) - Entry (v) (da) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.01/2018-Central Tax (Rate) with effect from 25.01.2018 - separate services or composite supply - benefit of reduced rate of tax - works contract services provided for the construction of the units and common areas and amenities on pro-rata basis. HELD THAT:- The applicant’s case is covered under concessional 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 them falls under the definition of “Affordable Housing Project”. 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 case of other flats which have carpet area more than 60 sq.mtrs. or commercial units, the applicant would be required to pay GST at normal applicable rate, since the benefit of reduced rate is available only for residential units of carpet area less that 60 sq. mts. We agree with applicant’s submission that entry (v) (da) of Notification 01/2018, mentioned above no-where restricts the benefit to a ‘Developer’ only. The Notification entry is qua the supply of service and not qua the person and therefore once a project qualifies as an Affordable Housing Project, the benefit of concessional rate of tax would be available in respect of works contract services pertaining to Low Cost Houses, irrespective of it being supplied by the Developer or the Contractor - In the subject case, the project qualifies as an Affordable Housing Project, and the benefit of concessional rate of tax @12% GST, would thus be available to the applicant. Whether the building completion and finishing services be regarded as a separate service or would it be a composite supply of works contract service as covered under entry v(da) of Notification No. 11/2017 to avail the benefit of reduced rate of tax? - HELD THAT:- In view of the terms of the contract, the building completion and finishing services would not be regarded as separate services. It would be a part of the composite supply of works contract services rendered by the applicant with principal supply of building construction, supply of finishing services will be covered under entry (v)(da) of Notification No. 112017 and applicant will be eligible to avail the benefit of reduced rate of tax i.e 12%, only in respect of dwelling units having area less than 60 sq.mtrs. What would be the appropriate rate of Goods and Services Tax on works contract services provided for the construction of the units and common areas and amenities on pro-rata basis which do not qualify the criteria of low cost houses’? - HELD THAT:- The concessional rate available to applicant is only in respect of low cost houses along with amenities constructed by the applicant. We find that the common amenities and areas are a part of ‘Affordable Housing Project’ and therefore the applicant will be entitled to benefit of concessional rate for the same, only when they are a part of low cost houses i.e. units less than 60 sq.mtrs. The applicant will thus have to discharge GST @ 12% (after deducting value of land) on works contract services provided for the construction of the units and common areas and amenities, which do qualify the criteria of low cost houses - since concessional rate would be available only for construction services pertaining to dwelling units less than 60 sq. mtrs including common areas and amenities on pro-rata basis, construction services including common areas and amenities on pro-rata basis, performed by the applicant in respect of dwelling units exceeding 60 sq.mtrs. would be liable to full rate of GST i.e. 18%.
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