TMI Blog2018 (9) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... plier (who is registered under GST) from whom we intend to receive composite works contract service (Inward Supply of Composite works contract)? Will it be 12% or 18%? - Held that:- At the time of hearing it was communicated to them that this question can only be raised by the supplier and not by them and they agreed to the same and the question is therefore not answered in this case. Input Tax Credit - Whether full ITC is allowable or it will be restricted to output GST liability? - Held that:- The builder or developer will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in his books to pay the output GST, in which case, he should not recover any GST payable on the flats from the buyers. He can recover GST from the buyers of flats only if he recalibrates the cost of the flat after factoring in the full ITC available in the GST regime and reduces the ex-GST price of flats - The applicant will be eligible for ITC subject to fulfilment of conditions as prescribed under the GST Act. Ruling:- The rate of tax to be levied is 12% (8% GST after deducting value of land) in case of Affordable Housing Project. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of designing and planning for the said project. The units to be constructed in the said project will be of upto 30 sqmtrs(EWS) or upto 60 sqmtrs (LIG). The firm is considering following two options regarding the activities of the project. 1. To undertake construction activity on its own. In this case the required material, labour etc and all other ancillary activities Will be undertaken by the firm itself. In that case the majority of tax rate on inward supplied will be of the rate 18% or 28%. 2. To sublet the entire construction activity to a third party contractor. In this case our inward supply will be in the form of a composite works contract service. Since the impact of GST on costing of the project will be of major amount, we are coming before your honor to get the clarity about the taxation/ ITC etc. Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant's view point and submissions on issues on which the advance ruling is sought) 1. What is the rate of tax to be levied on the sale of Flats/Units to the prospective buyers? Dealer is undertaking a Affo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (da) above, notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th March, the affordable housing projects are given infrastructure status under the category of 'Social and Commercial Infrastructure by adding a new sub-sector - Affordable Housing . In the same notification affordable housing is defined as 10 Affordable Housing is defined as a housing project using at least 50% of the Floor Area Ratio (FAR)/Floor Space Index (FSI) for dwelling units with carpet area @ of not more than 60 square meters. @ Carpet Area shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016. Thus as per our interpretation we will be covered by the above said notification issued by Ministry of Finance, Department of Economic Affairs vide F.NO. 13/6/2009-INF, dated 30th March. And our project Will be covered in clause (da) under item (v) of serial no 3 of the amended notification 11/2017 dated 28/6/17. And the rate of tax applicable will be CGST 6% and SGST 6%) irrespective of the status Of the prospective purchaser i.e. whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list of services at 12% rate against Sr No 7 entry is as follows: Sr.No. Description of services Rate 7 Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly (the value of land is deemed to be one-third of the total amount charged for such supplies) 12% with no refund of accumulated ITC But since the project is of affordable housing the above entry rate will not be applicable to the same. Thus as per our interpretation of provisions of law full ITC is allowable to us and balance amount in our electronic credit ledger can be claimed as refund. Vide further communication the applicant has submitted the Area Statement as follows:- Area of Plot 16090.00 sq mtrs. Less- Amenity Space 810.00 sq mtrs. Net Plot Area 15280.00 sq mtrs. Total consumed FSI of the plot 26055.00 sqmtrs. FSI Area consumed in flats having carpet area be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Table in the said Notfn, falling under scheme of classification of services mentioned therein. The relevant clauses of the said Notfn as amended by Notfn No. 20/2017-Central Tax (Rate) dated 22.10.2017 is reproduced below:- Sl.No. Chapter, Section or Heading Description of Service Rate (per cent) Condition 3. Heading 9954 (Construction services) (iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) .; (b) a Civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a civil structure or any other original works pertaining to the In-situ rehabilitation of existing slum dwellers using land as a resource through private participation under the Housing for All (Urban) Mission/ Pradhan Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urban development authority under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (Urban); (db) a civil structure or any other original works pertaining to the houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/ Lower Income Group (LIG)/Middle Income Group-I (MIG-I)/ Middle Income Group-2 (MIG-2) under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);'; (III) . ; (B) in item (v), (l) in sub-item (a), for the word excluding (Il) after sub-item (d), the following sub-item shall be inserted, namely: - (da) low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30 th March, 2017; According to sub item (da) of item iv, a civil structure or any other original works pertaining to the Economically Weaker Section (EWS) houses constructed under the Affordable Housing in partnership by State or Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The said notification of Department of Economic Affairs provides infrastructure status to Affordable Housing. The recommendation of the Council would extend the concessional rate to construction of flats/ houses of less than 60 sqm in projects other than the projects covered by any scheme of the Central or State Government also. The GST Council has also observed that It may be recalled that all inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land). As a result, the builder or developer will not be required to pay GST on the construction service of flats etc, in cash but would have enough ITC (input tax credits) in his books to pay the output GST, in which case, he should not recover any GST payable on the flats from the buyers. He can recover GST from the buyers of flats only if he recalibrates the cost of the flat after factoring in the full ITC available in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied by. the supplier (who is registered under GST) from whom we intend to receive composite works contract service (Inward Supply of Composite works contract)? Will it be 12% or 18%? At the time of hearing it was communicated to them that this question can only be raised by the supplier and not by them and they agreed to the same and the question is therefore not answered in this case. Q No. 3. Admissibility of Input tax credit. Whether full ITC is allowable or it will be restricted to output GST liability? As rightly submitted by the applicant, Section 16 of the GST Act, 2017 specifies the eligibility and conditions for availing input tax credit. Section 16 to Section 20 of the GST Act deals with Input Tax Credit. The GST Council in its 25th meeting held on 18th January 2018 at Delhi has extended concessional rate of 12% (8% GST after deducting value of land) to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The GST Council has also observed that It may be recalled that all inputs used in and capital goods dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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