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2022-TIOL-101-AAR-GST
Sri Bhavani Developers
GST - Applicant is into construction of residential buildings and have opted for new tax scheme as per Notification No.3/2019, dt: 29.03.2019 - they have entered into JDA with one Mr.Sadanda Chary for construction of residential units at Moulali - Joint Development agreement between land Owner and Builder was entered on 7 December 2017 and subsequently supplementary development agreement was entered on 17 December 2018 on area sharing basis - They have started the work however they didn't have any bookings as on 31-03-2019 and, therefore, they require clarification as to (1) whether they are falling into "other than Ongoing Projects" as per 3/2019 and 4/2019 - (2) whether RCM is applicable to daily wages, Labour Charges and Contract Labour? - (3) Whether there is any limit on the percentage of material to be used in project for Eg: cement 15%, sand 10% etc - (4) Whether Salaries, Incentives, Brokerage, Remuneration and interest on Working Capital are liable for RCM - (5) Whether i n a project of combination of affordable Flats (Carpet Area is less than 60Sq Mts), and Non affordable flats (Carpet Area is more than 60Sq Mts), can 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?; (6) Customer is entering into two types of agreements at the time of selling the semi finished residential flat viz. (a) "SALE AGREEMENT" and (b) Completion of semi finished works called "WORK ORDER", and in such cases what would be rate of tax; whether they are eligible for ITC and what is the tax rate in case of affordable housing project.
Held: According to the statement of relevant facts having a bearing on the questions raised by the applicant, at Para 6(c), work on the project commenced in June 2018 - 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 - Insofar as questions raised against Sr. no. 2 to 4 are concerned, the same is answered in the negative - In a combination project of affordable and non-affordable flats, different rate of tax can be adopted for different units viz. 1% for affordable and 5% for non-affordable units based on carpet area - As regards the last question no. 6, If the initial contract for land and building, even if entered through 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-a`-vis the initial agreement, then the construction made under this contract will attract 9% tax under CGST & SGST each with ITC: AAR
- Application disposed of: AAR |
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