In re Amba Township Pvt. Ltd. (GST AAR Gujarat)
Whether, under given facts and circumstances, is benefit of reduced rate as provided under Entry Number 3(v)(da) of the Notification No. 11/2017-Central Tax (Rate) as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018, available to the applicant for houses constructed with a carpet area of 60 square metres per house?
The issue involved in this case pertains to applicability of benefit of Entry No.3(v)(da) of the Notification no. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018 in respect of low-cost houses constructed by the applicant with 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 30.03.2017.
Relevant portion of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 (as amended) reads as under:
“3.v.(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 30th March,2017;”;
Therefore, in order to be eligible for the benefit of the aforementioned notification, the work should be for construction of 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 30th March,2017.(Affordable housing has been defined as a housing project using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 sq.meters).
Since Part-B of Sector-4 of township cannot be considered as a standalone housing project since it shares common land, common facilities and common entrance with Part-A of Sector-4 of the township and since 50% of FAR/FSI of the entire housing project of Sector-4 (of Amba townshippvt.ltd.) comprising of Part-A and Part-B has not been used for construction of dwelling units with carpet area of not more than 60 sq.meters (as per the requirement in Notification No.13/06/2009 dated 30.03.2017 of the Government of India, Ministry of Finance, Department of Economic Affairs), the said housing project cannot be considered as an ‘affordable housing project’. The applicant, therefore, does not fulfil the conditions as envisaged in Entry No.3(v)(da) of Notification No:11/2017-Central Tax(Rate) dated 28.06.2017 (as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018), hence the benefit of the said notification is not applicable to them.
As applicant has not fulfilled the condition mentioned at Para-10 above and therefore the benefit of Entry No.3(v)(da) of Notification No:11/2017-Central Tax(Rate) dated 28.06.2017 (as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018)is not applicable to them.
FULL TEXT OF ORDER OF BEFORE THE AUTHORITY OF ADVANCE RULING, GUJARAT
The applicant vide their application for Advance Ruling has submitted that they are engaged in the construction of residential and commercial construction on works contract basis; that at present they are engaged in the construction and development of a township namely “AMBA TOWNSHIP” located at Adalaj, Gandhinagar, Gujarat; that they are developing a township which consists of many real estate projects within a township; that since the development of the town is a continuous process, the applicant is developing the township in a phased manner; that different schemes or projects are being undertaken by the applicant at different span of time; that at present, Sector-4 of the township is being constructed which is also divided into two parts namely Part-A and Part-B.
Part-A is further divided into two phases i.e. Phase-1 and Phase-2.
The projects under Phase-1 are (i) Sarvaswa-1 (ii) Sanatan-1 (iii) Sanatan-2 (iv) Stuti-1 (v) Stuti-2 (vi) Swaroop-1 (vii) Swaroop-2 (viii) Swaroop-3 and (ix) Swaroop-4.
The projects under Phase-2 are : (i) Sanatan-3 (ii) Swaroop-5 and (iii) Swaroop-7
The projects under Part-B are: (i) Sarvasva-2 (ii) Stuti-3 and (iii) Swaroop-6 which are mainly for small and affordable houses; that it can be seen that 74.08% of the total Floor Space Index (FSI) is used for small houses having carpet area upto 60 sq. metres which can be understood better by seeing the table below:
