TMI Blog2019 (5) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... Y, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (Under section 98 of the Central and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The, resent application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Puranik Construction Pvt. Ltd.., the applicant, seeking an advance ruling in respect of the following question:- The question / issue before Your Honor is eligibility of Notification 01/2018-CentraI Tax (Rate) dated 25.01.2018 which provides for concessional rate of GST @ 12% on supply of works contract service in respect of Original Works pertaining to construction of a Low Cost House in an AHP. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be awarded a Construction contract of 26 buildings wherein all the flats/units will have residential carpet area of 60 Sq. Mts. or less and there will be commercial construction of units on the ground floor. They have stated that in this scenario it is also possible that they will get one contract for construction of residential portion in the 26 buildings and another contract for construction of commercial portion in the said 26 buildings. 2.4 The proposed contracts would include civil work for construction of substructure for buildings (Flats/Units); Shuttering and Mivan Work; RCC Concrete work (incl. supply of concrete); Supply of Reinforcement steel; Masonry work and Scaffolding and plastering work. 2.5 They have submitted that theirs is a composite supply of works contract by way of original works whereby LCH upto a carpet area of 60 sq. mts will be constructed in an Affordable Housing Project. They have reproduced the definition of the term Works contract and the term Affordable Housing as defined under the DEA Notification and have stated that all conditions under the above said Entry (v) (da) is satisfied by them and that the subject housing proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their contentions that more than 50% of the FSI in the project will be used towards construction Of units having RERA carpet area upto 60 sq.mtrs have also produced N .A. Order of Neral project to support their contention that the project is a housing project. 03. CONTENTION - AS PER THE CONCERNED OFFICER 3.1 The jurisdictional office has submitted that in the subject project of the total FSI of the project is being consumed for the construction of Low-Cost House and therefore the project would qualify as an AHP as per the DEA Notification. 3.2 Citing the decision of the Maharashtra AAR in case of Prajapati Developers, the jurisdictional office has supported the applicant s contention in of concessional rate of GST @12% in their case, on supply of works contract service in respect of Original Works pertaining to construction of a Low Cost House in an AHP and has stated that for the remaining commercial units no concession should be given. 04. HEARING 4.1 The Preliminary hearing in the matter was held on 10.01.2019, Sh. Gourav Sogani from ELP, Advocate Solicitors appeared and requested for admission of the application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject which has been given infrastructure status vide Government of India notification mentioned above. 5.5 Department of Economic Affairs notification issued vide F. No. 13/6/2009-INF, dated the 30th March,2017 has included Affordable Housing under the column Infrastructure sub sector against the category of Social and Commercial Infrastructure and has further defined Affordable Housing 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 and 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. 5.6 One of the recommendations made by the GST Council in its 25th meeting held on 18 th January, 2018 at Delhi was to extend the 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 said notification of Department of Economic Affairs provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the above clarification, notification and the clause (da) of item (v) of Notification No. 01/ 2018-Central Tax (Rate) and facts on record, we find that that the applicant s case is covered under the tax rate of 12%, 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 as also claimed by them in their application. 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-CentraI Tax (Rate) was issued and the benefit this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs., in this scheme, which is covered in the category of affordable housing. In case of other flats which have carpet area more than 60 sq.mtrs. or commercial units, the applicant would required to pay GST at normal applicable rate, since the benefit of reduced rate is only for residential units of carpet area less that 60 sq-mts. 5.9 We have discussed the issue in detail in our order passed in the case of Prajapati C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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