Case Law Details
In re Confident Projects Residential (GST AAR Kerala)
Introduction: In a significant ruling by the Authority for Advance Ruling (AAR) in Kerala, the GST implications on construction services within residential real estate projects have been clarified. M/s. Confident Projects Residential, a prominent builder in Kerala, sought an advance ruling on whether different GST rates could be applied to affordable and non-affordable residential apartments within the same project. This case sheds light on the taxation nuances for mixed real estate projects under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Kerala State Goods and Services Tax Act, 2017 (KSGST Act).
Detailed Analysis: The applicant, engaged in the construction and development of residential real estate projects, proposed a project comprising both affordable and non-affordable housing units. According to Notification No. 3 of 2019, affordable residential apartments attract a GST of 1.5% (0.75% CGST and 0.75% SGST), while other residential apartments are taxed at 7.5% (3.75% CGST and 3.75% SGST).
The AAR analyzed the tax structure introduced from April 1, 2019, by amending Notification No. 11/2017 CT (Rate) through Notification No. 03/2019. The ruling focused on whether the mentioned GST rates apply to construction services for affordable and non-affordable residential apartments in a single project. The Authority clarified that both categories could coexist in a residential real estate project, with respective GST rates applicable as per the conditions outlined in the notification.
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