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2022 (8) TMI 365 - AAR - GSTLevy of GST on RCM basis - project is falling under "other than On-going Projects" - New project or not - share of land lord -applicability of notification 4/2019 - applicability of RCM to daily wages, Labour Charges and Contract Labour - limit on the percentage of material to be used in project - Whether Salaries, Incentives, Brokerage, Remuneration and interest on Working Capital are liable for RCM? - project of combination of affordable Flats (Carpet Area is less than 60Sq Mts), and Non affordable flats (Carpet Area is more than 60Sq Mts) - whether different rate of tax be adopted for different units, i.e., GST 1% in case of affordable Units and 5% in case of Non affordable units based on the Carpet area? HELD THAT:- The Notification No. 03/2019 makes a distinction between ‘Ongoing project’ in clause (xx) of Para 4 and ‘Other than ongoing project’ in clause (xxviii) of Para 4. Accordingly ‘Other than ongoing project’ means a project which commences on or after 01.04.2019. Therefore the project undertaken by the applicant does not fall under this definition as claimed by him in the statement of facts submitted separately on 21.12.2021 - This notification offers the promoter an option to shift to the new scheme or to continue under the earlier scheme. Under the new scheme, for residential apartments, the developer promoter has to pay CGST as well as SGST @0.5% without ITC for affordable residential apartments and 2.5% without ITC for other residential apartments and reverse the input tax credit available in the credit ledger as on 31.03.2019. However if the developer promoter intends to continue under the old scheme and avail ITC, he has to submit a declaration before 20.05.2019 to the jurisdictional authority. In the case of the applicant, it appears they have not opted for the old scheme, hence they fall under new scheme and therefore have to pay tax @0.5% for CGST as well as SGST for affordable residential apartment and @ 2.5% CGST & SGST for other residential apartments without availing ITC. The tax on the portion of constructed area shared with the land owner-promoter has to be paid by applicant as his liability in the capacity of developer-promoter and not as Reverse charge mechanism. The law regarding services by an employee to the employer in the course of or in relation to his employment enumerated in Schedule III to CGST Act, 2017 remains unchanged. Therefore tax will not be attracted for labour engaged on daily basis or employees etc., if the service is rendered in the course of such an employment. However manpower supply or labour supply services by manpower supply agency falls under SAC 98519 and is taxable @18%. This tax has to be paid by the manpower supply agency. The Notification No. 03/2019 makes a distinction between ‘Ongoing project’ in clause (xx) of Para 4 and ‘Other than ongoing project’ in clause (xxviii) of Para 4. Accordingly ‘Other than ongoing project’ means a project which commences on or after 01.04.2019. Therefore the project undertaken by the applicant does not fall under this definition as claimed by him in the statement of facts submitted separately on 21.12.2021 - If the initial contract for land and building, even if entered through (2) different un severable agreements, constitutes a single contract and hence will attract tax @0.5% for affordable housing and @2.5% for other housing under CGST & SGST respectively without ITC. However any other agreement which is beyond the scope of initial agreement and is a severable agreement vis-à-vis the initial agreement then the construction made under this contract will attract 9% tax under CGST & SGST each with ITC.
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