TMI Blog2019 (10) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... no resale of the constructed portion is intended, the project is not covered under the definition of a real estate project - Since the applicant is not intending to sell any of the said commercial area, the project undertaken by the applicant cannot be covered under a Real Estate Project and hence cannot be covered under subitem (if) of item 3 of the Notification. The tax rate applicable on the supply of construction service to the land owner in lieu of transfer of development rights to the promoters portion is liable to tax at 9% under CGST and 9% KGST under entry no 3(xii) of the Notification No.11/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No.3/2017-Central Tax (Rate) dated 29.03.2019. The applicant is eligible for input tax credit on the same. In the instant case can the applicant, the service provider of construction of commercial space utilise the ITC relating to the construction activity on supply of other goods and services? - HELD THAT:- The applicant is capitalizing his portion of the building as an immovable property and as per section 17(5)(d) of the CGST Act, 2017, the applicant is not eligible to claim input tax credit on the inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Whether the above rates are applicable to constructions comprising entirely of construction of commercial space. If not, what is the rate of tax applicable both with ITC and without ITC? 2. In the instant case can the applicant, the service provider of construction of commercial space utilise the ITC relating to the construction activity on supply of other goods and services? 3. Can input tax paid on inputs relating to construction activity i.e. on construction of buildings / built up space be utilised against the output tax payable on letting out of the same space? 4. Is providing residential accommodation as paying guest to students outside the premises of the University/ College / School campus taxable under GST? If yes, what is the rate of tax applicable? 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that they are in the business of building, developing, constructing and trading in immovable properties and TDSs, providing construction or real estate or property development related services. b. The applicant has entered into a Joint Development Agreement on 11.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elongs to the landowners and the same is offered to the applicant for development of a commercial property (b) The applicant shall construct the project in the property (c) The landowners shall be entitled to 40% of the built area with 40% share in the land and they are entitled to hold or sell, lease or otherwise dispose of their share of the built area along with 40% of the undivided interest in the property (d) The applicant who is the developer, shall be entitled to 60% of the built area with 60% share in the land and is also entitled to hold or sell, lease or otherwise dispose of their share of the built area along with 40% of the undivided interest in the property. (e) The entire cost of construction of the property shall be borne by the applicant and the landowners shall not be required to contribute any amount for the purpose of construction (f) The landowners shall convey/ transfer 60% of the undivided share in land comprised in the constructed building to the applicant or its nominees upon completion of construction. The applicant may enter into construction agreements in respect of the project, to execute one or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly or partly, except where the consideration is received after the issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier . 4.6 In the light of the above, the supplies of the applicant needs to be verified and on verification it is observed that the applicant is not intending to supply the constructed commercial apartments to any prospective buyers and himself capitalizing the same and intends to use it for leasing/ renting. Since no resale of the constructed portion is intended, the project is not covered under the definition of a real estate project. In this regard, it is pertinent to note the definition of a real estate project which is defined in clause (xviii) of paragraph 4 in the said notification as under: (xviii) the term Real Estate Project (REP shall have the same meaning as assigned to it in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); Clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) defines the Real Estate Project as under: (zn) real estat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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