TMI Blog2022 (5) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as RREP) which commences on or after 1st April, 2019. The concessional rate is also applicable in case of an ongoing RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein. In the instant case it is an admitted fact that the applicant is not a promoter but a sub-contractor and hence the benefit of the said entry i.e. concessional rate of GST of 0.75%, for the proposed construction, is not applicable to the applicant - other details need not be examined as the entry itself is not applicable to the applicant. - KAR ADRG 14/2022 - - - Dated:- 30-4-2022 - DR. M.P. RAVI PRASAD AND SRI. T. KIRAN REDDY, MEMBER (CENTRAL) Represented by : Sri A.S. Harihara Kumar, Company Secretary ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 AND UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s Om Construction Company, Arya Nivas, 4th Floor, No.7, 3rd Cross, Davidappa Layout, Veeranapalya, Bengaluru-560045, having GSTIN 29DRLPR4247F1ZA, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less than 60 Square meters the gross amount charged is not more than forty-five lakh rupees. Further, more than 50% of Floor Space Index (FSI) area shall be utilized towards construction of Low Cost housing of the project so as to qualify as 'Affordable Housing Project' (AHP) and also to get infrastructure status in terms of the Notification F.No. 13/6/2009-INF dated 30.03.2017 issued by the Department of Economic Affairs (DEA Notification). In the instant case, entire 100% Land area is used towards construction of the residential flats / units, having carpet area of 60 Sq. Mtrs. or less and hence the said project would qualify as an 'Affordable Housing Project' (AHP). 5.2 The applicant contends that they are eligible for concessional rate of CGST/KGST @ 0.75% for construction of affordable residential apartments by a promoter in a Residential Real Estate Project (herein after referred to as RREP) as per Sl. No.3(i) of the Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 as amended by notification No.30/2018-Central Tax (Rate) dated 31st December, 2018 and further amended by Notification No.03/2019-Central Tax (Rate) dated 29th March, 2019, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of works contract services pertaining to low-cost Houses, irrespective of it being supplied by the Developer or the Contractor. 5.7 The applicant has also cited the decision of the Maharashtra AAR in the case of Shree Construction (TS-444 AAR-NT-2018) wherein it was held that the benefit of 12% rate was also available to the sub-contractor supplying services to the main contractor who in turn is providing works contract services for original works pertaining to Railways and have contended that the ratio laid down in the above ruling squarely applicable to the instant case. 5.8 The applicant is of the view that the Affordable Housing Scheme is low-cost housing scheme for people having low income. Affordable / low-cost housing depends on 3 factors such as income, size of house and affordability. Forms of affordable housing include indigenous housing, subsidized housing, emergency shelters and formal informal rental. The affordable housing scheme aims at 'Housing for All by 2022' which mission was launched by the Government of India in 2015 to accomplish a decades-old development objective of providing housing to all citizens. The government notified the concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the land cost on money consideration received from the prospective buyer as per Sl.No.3(i) of the Notification No. 03/2019-Central Tax (Rate) dated 29th March, 2019, which is an amendment to the entry number 3 of the principal notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, whose reference is invited herein, which is as under: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 1 2 3 4 5 3 Heading 9954(Construction services (i) Construction of affordable residential apartments by a promoter in a Residential Real Estate Project (herein after referred to as RREP) which commences on or after 1st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) below, as the case may be, in the manner prescribed therein, intende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructed apartments against such transferred rights and sells such apartments to his buyers independently. Provided also that eighty percent of value of input and input services, [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only; Provided also that inputs and input services on which tax is paid on reverse charge basis shall be deemed to have been purchased from registered person; Provided also that where value of input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of completion certificate or first occupation of the project, whichever is earlier) falls short of the said threshold of 80 per cent., Central tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of nine percent on reverse charge basis and all the provisions of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further the said apartment/ s must be intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. 13. In the instant case it is an admitted fact that the applicant is not a promoter but a sub-contractor and hence the benefit of the said entry i.e. concessional rate of GST of 0.75%, for the proposed construction, is not applicable to the applicant. Thus we do not intend to examine the other details as the entry itself is not applicable to the applicant. 14. In view of the foregoing, we pass the following RULING i. Serial No.3(i) of Notification No.03/2019-Central Tax (Rate) New Delhi, the 29thMarch, 2019 (parent Notification No. 11/2017-Central Tax(Rate), dated the 28th June, 2017 as amended by Notification No.30/2018-Central Tax (Rate), dated the 31st December, 2018 is not applicable to the applicant who is one of the sub-contractors to the builder / Developer / Contractor of Affordable housing under PMAY Scheme. ii. The concessional rate of CGST @ 0.75% as per entry No.3(i) of the N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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