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2021 (7) TMI 542 - AAR - GSTRate of GST with effect from 01.04.2019 - quantification of taxable value - Benefit of ITC not availed - promotion of villa projects for the villa buyers - tax rate of redeveloped projects undertaken after 01.04.2019 which were uncompleted and already started by developers before 31.03.2019 - calculation of taxable value of construction of villa on the projects developed and promoted by DLPL on the arrangement of agreement with landlord, landlord selling the plots directly to various villa buyers identified by DLPL. HELD THAT:- A new tax structure for real estate sector was introduced 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. Admittedly, the services of construction of villas are being rendered by the applicant after 01.04.2019 and hence the rate as notified under the new tax structure is applicable in respect of the construction services rendered by the applicant. From the definition of the term “apartment”; “residential apartment” “real estate project” and “promoter” as above it is clear that the residential villas being constructed by the applicant fall within the definition of residential apartment and the projects undertaken by the applicant including the redevelopment projects fall within the definition of real estate project and the applicant fall within the definition of “promoter”. Further, on a conjoint reading of the above provisions of law, the facts as stated in the application and the terms and conditions in the agreements produced as Annexure A and C it is seen that the services of construction of villas provided by the applicant squarely fall within the description of services specified in Item (i) and (ia) of SI No. 3 of the 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 and accordingly the tax rates as prescribed in the said entries shall be applicable to the said services supplied by the applicant - The applicant is liable to pay GST at the rate of 1.5% in respect of the services of construction of affordable residential apartments as per entry at Item (i) and at the rate of 7.5% in respect of the services of construction of residential apartments other than affordable residential apartments as per entry at Item No. (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries. Taxable value of the services of construction of residential villas rendered - HELD THAT:- The value of land 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. Whether the activity of purchase of land, development of the same in to plots and sale of the same to various customers without collecting any advance from the customers for undertaking the development activities attract GST? - HELD THAT:- In the instant case it is stated by the applicant that they are not receiving any advance from their customers for undertaking development activities in the plot and the plot is sold after development. Hence the transaction is in respect of sale of developed plots / land and is covered by Paragraph 5 of Schedule III of the CGST Act which stipulates that sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building shall be treated neither as a supply of goods nor a supply of service. Therefore, the transaction is not liable to GST.
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