Meaning of ‘Construction Services’ under GST Law,2017:

As per Section 2(119) of the CGST Act, 2017 as ‘works contract’ means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.”

As per the GST (Goods and Services Tax) law, construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer is a supply of service and hence, is liable to the goods and services tax (GST). However, no GST is meant to be paid on ready to move in or completed property as per the CGST Act, 2017. The GST is payable only on the under construction houses.

Construction Services under GST

Schedule II of the CGST Act, 2017 pertains to activities or transactions to be treated as “ Supply of goods or supply of services “.

5(b) of Schedule-IISupply of services” Construction of complex, building, civil structure or a part thereof , including a complex or building 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.”

Original Work means : As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2(zs) “Original Works” means all new constructions. They are

(i) All types of additional and alterations to abandoned or damaged structures on land that are required to make them workable,

(ii) Erection, commissioning or installation of plant, machinery or equipment or structures whether pre-fabricated or otherwise.

Residential Complex: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2 (zzb) “Residential Complex” means any complex comprising of a building or buildings having more than one single residential unit.

Single Residential Unit: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2 (zze), “Single Residential Unit” means a self-contained residential unit which is designed for use wholly or principally for residential purposes for one family.

 Apartment: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3(v) of the notification, The term ‘Apartment means” shall have the same meaning as assigned to it in clause (E) under section 2 of the Real Estate (Regulation and Development) Act,2016.

Whereas, as per Sec.2€ of the RERA Act, The term “Apartment” whether called as block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit tenement, unit or by any other name, means a separate ad self – contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of land , used or intended to be used for any residential or commercial use such as residence,, office shop, show room, or godown or for carrying on any business, occupation, profession or trade or for any other type of use ancillary to the purpose specified.

Affordable Residential Apartment: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3 (vi) of the notification. The term “Affordable Residential Apartment” shall have meaning assigned to it in the notification No. 11/2017-Central Tax (Rate), published in the Gazette of India, Extraordinary Part II, Sec.3, Sub-Section(i) dated. 28th June, 2017 vide GSR No.690 E  dated. 28th June, 2017.

Promoter: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3(vii) and further Notification No. 04/2019–Central Tax (Rate), dated. 29.03.2019, w.e.f. 01.04.2019. The term “Promoter” shall have the same meaning as assigned i=to it in clause (zk) under section 2 of the Real Estate (regulation and Development) Act, 2016. Whereas, as per section 2(zk) of the RERA Act, the term “Promoter means

(i). A person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or

(ii). A person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon, or

(iii). Any development authority or any other public body in respect of allottees of:-

(a) Buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or

(b) Plots owned by such authority or body or placed at their disposal by the Government for the purpose of selling all or some of the apartments or plots; or

(iv). an apex State level co-operative housing finance society and a primary co-operative housing society which constructions apartments or buildings for its members or in respect of the allottees of such apartments or buildings; or

(v). Any other person who acts himself as a builder, colonizer, contractor, developer, Estate developer or by any other name or claims to be acting’s as the holder of a power of attorney from the owner of the and on which the building or apartment is constructed or plot is developed for sale ; or

(vi). Such other person who constructs any building or apartment for sale to the general public.

Explanation:- For the purpose of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters ad shall be jointly liable as such for the functions and responsibilities specified  under this Act or the rules and regulations made thereunder.

Landowner Promoter: Landowner Promoter means as per Explanation given in the Notification No. 03/2019-CT(Rate) , dated. 29th March, 2019, a promoter who transfer the land or development rights or FSI to a developer-promoter for construction of apartments and receives constructed apartments against such transferred rights and sells such apartments to his buyers independently.

Developer Promoter: Developer Promoter means as per Explanation given in the Notification No. 03/2019-CT(Rate), dated. 29th March, 2019, a promoter who constructs or converts a buildings into apartments or develops a plot for sale.

Project: As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (viii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019, The term ‘Project” shall mean a Real Estate Project or a Residential Real Estate Project.

Real Estate Project (REP):  As per Notification No 12/2017-CT(Rate) , dated. 28th June, 2017, Para 3 (ix) further notification No. 04/2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Real Estate Project (REP)” shall have the same meaning as assigned to it in clause (zn) under Section 2 of the Real Estate (Regulation and Development) Act, 2016, whereas as per section 2 (zn) of the RERA Act “Real Estate Project means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments as the case may be, and includes the common areas, the development works , all improvements and structures thereon, and all easement rights and appurtenances belonging thereto.

Residential Real Estate Project (REP): As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (x) further notification No. 04/2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Residential Real Estate Project (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15% of the total carpet area of all the apartments in the REP.

Carpet Area:- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xi) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Carpet Area” shall have the same meaning as assigned to it clause (k) under section 2 of the Real Estate (Regulation and Development) Act, 2016, where, as per section 2 (zk) of the RER Act, Carpet Area” means net usable floor of an apartment, excluding the area covered by the external walls, area under services shafts, exclusive balcony or verandah area and exclusive open terrace area , but includes the area covered by the internal partition walls of the apartment.

An Apartment booked on or before the date of issuance of completion certificate or first occupation of the project: :- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019,”An Apartment booked on or before the date of issuance of completion certificate or first occupation of the project “shall means an apartment which meets all the following three conditions  namely:-

(a) Part of supply of construction of the apartment service has time of supply on or before the said date; and

(b) Consideration equal to at least one installment has been credited to the bank account of the registered person on or before the said date; and

(c) An allotment letter or sale agreement or any other similar document evidencing booking of the apartment has been issued on or before the said date.

Floor Space Index (FSI): :- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xiii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019,” Floor Space Index (FSI) shall means the ratio of a building’s total floor area (Gross Floor Area) to the size of the piece of land upon which it is built.

Affordable Residential Apartment: As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xiii) further notification No. 04.2019-Central Tax (Rate)  dated. 29.03.2019, w.e.f. 01.04.2019,The term ‘Affordable Residential Apartment” shall mean:-

(a) A residential apartment n a project which commences on or after 1st Aprl, 2019, or in an going project in respect of which the promoter has not exercised option in the prescribed form to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be , having carpet area not exceeding 60 square meter in metropolitan cities and 90 square meters in cities or towns other than metropolitan cities  and for which the gross amount charged is not more than forty five lakhs rupees.

For the purpose of this clause:-

(i) Metropolitan cities are Bengaluru , Chennai, Delhi NCR (limited to Delhi) Noida, Greater Noida, Ghaziabad Gurgaon, Faridabad), Hyderabad, Kolkata, and Mumbai (Whole of MMR) with their respective geographical Limits prescribed by an order issued by the Central Government or State Government in this regard;

(ii) Gross amount shall be the sum total of:-

A. Consideration charged for the services specified at item (i) and (ic) in column (3) against sl.3 in Table;

B. Amount charged for the transfer of land or undivided share of land , as the case may be including by way of lease or sublease; and

C. Any other amount charged by the promoter from the buyer of the apartment including preferential location charges , development charges, parking charges, common facility charges etc.

(b) An apartment being constructed in an ongoing project under any of the schemes specified in sub-item (b), sub-item(c),sub-item(d) and sub item(da) and sub-item(db) of item (iv) ,sub item(b) sub-item(c),sub-item(d) and sub-item(da)of item(v), and sub-item (c) of item(vi) , against serial number 3 of table above 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) against serial number 3 as the case may be.

Construction services are divided into 2 construction services:

(i) General Construction services for all complete constructions,

(ii) Specialized construction services like services related to parts of buildings or civil engineering works, rather than the complete construction services.

General Constructions services are divided into 6 categories. They are as below:

1. General Construction Services of single dwelling or multi dwelling or multi storied residential buildings,

2. General Construction Services of other residential buildings,

3. General Construction Services of industrial buildings,

4. General Construction Services of commercial buildings,

5. General Construction Services of other non-residential buildings.

6. General Construction Services of other buildings n.e.c.

Specialized construction services divided into 3 categories. They are as below:

1. Services involving repair, alterations, additions, replacements, renovation, maintenance or remodeling of the buildings covered above,

2. Site preparation services,

3. Building completion and finishing services.

General Construction services of buildings:

1. General Construction Services of single dwelling or multi dwelling or multi storied residential buildings: This services includes construction services of single dwelling or multi dwelling residential buildings and Construction Services of single storied or Multi Storied Residential Buildings. Service Account Code is 995411.

2. General Construction Services of other residential buildings: Construction services of residential buildings for communities, including residences for the elderly, students, children and other social groups such as retirement homes, hostels, fraternity homes, orphanages, homeless shelters etc. Service Account Code is 995412.

3. General Construction Services of industrial buildings:

(1) Construction services includes buildings used for production and assembly activities of industrial establishments.

(2) Factories, plants and workshops,

(3) Agricultural buildings including silos and other storage facilities etc., Service Account Code is 995413 for the above services as per GST Law, 2017.

4. General construction services of commercial buildings: The following Constructions are treated as “Construction services of commercial or administrative buildings “:-

(1) Buildings used primarily in the wholesale and retail trades,

(2) Shopping centers, shopping malls, department stores, detached shops and boutiques, indoor markets etc.,

(3) Warehouses,

(4) Exhibition halls,

(5) Office buildings and bank buildings,

(6) Air, Rail, or Road transport terminals,

(7) Parking garages and Petrol and service stations etc.,

(8) Service Account Code is 995414 for the above services as per GST Law, 2017.

5. General Construction services of other non-residential buildings: The following services are considering construction services of other –residential buildings under GST Law, 2017:-

(1) Public entertainment buildings such as cinemas, theatres, concert halls, dance halls and nightclubs,

(2) Hotels, motels, inns, hostels ad similar buildings,

(3) Restaurants,

(4) Educational buildings such as schools, colleges, universities, libraries, archives and museums etc.,

(5) Health-related buildings such as hospitals, clinics and sanatoria including veterinary clinics etc.,

(6) Indoor sports or recreation installations (ice rinks, gymnasia, indoor tennis courts, general purpose sports halls, boat sheds, boxing rings etc.,

(7) Convention and congress centers etc.,

(8) Religious buildings etc.,

(9) Prison buildings, law courts, parliament buildings etc.,

(10) Non-residential farm buildings etc.,

(11) Communication buildings (radio and television broadcast buildings, telephone exchange buildings, telecommunication centers etc.,

(12) Service Account Code is 995415 for the above services as per GST Law, 2017.

6. General Construction Services of other buildings n.e.c: This Construction Services of other buildings not elsewhere specified classified as” Construction Services of other buildings n.e.c. Service Account Code is 995416 as per GST Law,2017.

Eligibility of Input Tax: Up to 31st March,2019 the input tax credit (ITC) was available to supplier of construction services. But as per recent notification no. 3/2019, CT(Rate) dt. 29.3.2019, Input Tax Credit shall not be taken (Except to the extent as prescribed in Annexure –I in the case of REP other than RREP and in Annexure-II in the case of RREP. It may be noted that there is no bar in taking ITC for the supply of construction services mentioned against entries No. 3(ie) and (if). There is also no bar for residual entry at S.No.3(xii). Assesse can avail ITC for these entries.

Reverse Charge Mechanism : RCM is applicable as per  Notification No. 3/2019-Central Tax (Rate) dated. 29.03.2019. As per the above notification the below items are liable to RCM:-

(1) Inputs and input service s (other than cement and capital goods)

(a) Calculate tax payments on the shortfall at the end of the financial year,

(b) Tax liability shall be added to his output tax liability in the month not later han the month of JUNE following the end of the financial year.

(2) Cement: In the month in which it is received,

(3) Capital Goods: Since provisions are silent , hence in the month of receipt of these goods.

Rate of Tax for the purpose of RCM: Dear Colleagues for better understanding regarding RCM here with I am providing information in Table Form:

S.NO. Description Notification No. Rate of Tax
1 All inputs other than cement No. 8/2019-CT(Rate) dt. 29.03.2019 (Entry No. 452Q of Schedule-III)       18%
2 Cement No. 3/2019-CT ( R ) dated. 29.03.2019 Applicable Rate
3 All Input Services No. 3/2019-CT(R) dt. 29.3.2019 (Entry No. 39       18%
4 Capital Goods               —— Applicable Rate.

Requirement of Registration:

Requirement of registration under GST Law,2017:

As per Section 22 (1) of CGST Act, 2017 every supplier shall be liable to take registration in every State or UT from where he makes a taxable supply of goods /or services, if his aggregate turnover in a financial year exceeds threshold limit of Rs.20 Lakhs or 10 Lakhs in Easter States.

Example for aggregate turnover:

(1) If any taxable person (PAN Based) is having business turnover Rs. 15 Lakhs and Rs. 6 lakhs rental income on immovable property liable to  take GST registration.

(ii). If any taxable person (PAN Based)is having tax business turnover Rs 13 Lakhs and  Rs. 6 Lakhs rental income on immovable property not require to take registration (Rs.13 plus Rs. 6 lakhs = 19 Lakhs, no obligation to take registration.

(iii) Is any taxable person (PAN Based) is having Rs. 25 Lakhs business turnover and such business in “Individual Status” as per Individual PAN Based he has to take registration for such business and income from immovable property belongs to (HUF PAN BASED) and turnover on immovable property of Rs. 6 lakhs, there is no obligation to take GST registration under HUF capacity.

Rate of Tax Applicable:

I am providing applicable rate of tax under GST Law in table for better understanding:

S. No Entry No. Nature of Service Gross Rate Effective Rate
1 3(i)/R Affordable residential apartment in a RREP (Commenced on or after 01.04.2019 or ongoing projects opted for new rates) intended for sale @1.5% @1%
2 3(ia)/R Residential apartment (other affordable residential apartments) in a RREP (commenced on or after 01.04.2019) or ongoing projects opted for new rates), intended for sale @7.5%  @5%
3 3(ib)/R Commercial Apartments in a RREP (commenced on or after 01.04.2019 or ongoing projects opted for new rates) intended for sale @7.5% @5%
4 3(ic)/R Affordable residential apartment in REP, other than in a RREP (commenced on or after 01.04.2019, or ongoing projects opted for new rates), intended for sale @1.5% @1%
5 3(id)/R Residential apartment (other than affordable residential apartments) in  REP other than in a RREP (Commenced on or after 01.04.2019, or ongoing projects opted for new rates) intended for sale @7.5% @5%
6 3(ie)/R Ongoing projects in specified schemes (of lower rate of tax) where the promoter has not opted for new rates @12% @8%
7 3(if)/R Commercial Apartments in REP other than in RREP @18% @12%
8 3(if)/R Ongoing Residential apartments as on 31.03.2019 , other tha affordable residential apartments, where promoter has opted to pay at old rates (other than S.No1 to 6 above) @18% @12%

Note: Gross rate is the rate of specified in the respective entry, and effective rate is after one third deduction rom the total value towards value of land as specified in Paragraph 2 of the Notification No. 11/2017 –CTR dated. 28th June, 2017.

> Effective GST Rate on affordable housing has been reduced to 1% without the benefit of the ITC as against the earlier effective rate of @8% with ITC. Further new definition has been provided for the term “affordable housing”. For ongoing projects, the constructions under the specified scheme shall be called as “affordable residential apartments” even though they do not satisfy the area requirement (60 or 90 square meters) or Rs 45 Lakhs provided the promoter has opted to pay tax at new rates.

> Effective GST Rate for non-affordable housing has been reduced to 5% without Input Tax Credit from the earlier effective rate of 12% with Input Tax Credit.

> Amendments apply only to residential projects and not to commercial projects (except located in RREP).

> New GST rates are mandatory for new projects from 01st April,2019,

> Residential projects with 15% commercial space will be treated as residential projects,

> Transfer of Development Right, Long Term Lease and Floor Space Index etc., an Intermediate tax will be exempt from GST Tax on such residential properties on which GST is payable, otherwise GST shall be payable by the promoter on reverse charge basis on completion of project. Comprehensive Notifications have been issued in this regard,

> Builders of ongoing housing projects as on 31st March,2019 have been allowed to choose either of the two options. (i) Pay GST at existing rates till the completion of project, or (2) adopt the new GST rates. Option for the new rates could be exercised project wise,

> Option could be exercised up to 20 May,2019. If the specified form has not been filed , it shall be deemed that promoter has opted new rates,

> In the new regime , procurement of(80% of inputs and input services) an capital goods should be made from the registered dealer, other wise tax shall be paid on RCM basis by the Promoter,

> Project wise records and accounting shall maintained,

> Eligible Input Tax Credit on the ongoing projects shall be mandatory determined by the promoter as per formula laid down in the Notification within 6 months, notwithstanding he does not have any ITC balance as on 31 March, 2019. These calculations not only provide relief to the promoter to carry forwarded ITC to the next year 2019-20, but also make the promoter liable to reverse/pay the ITC excess availed (utilized or not) up to till 31st March, 2019 which depends upon project to project.

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34 Comments

  1. Irshad parhan says:

    Sir,

    My brother business is General Construction Services of industrial buildings his total tornover 25 lakhs approx. In the financial year 2019-20.
    Including labour. material all.

    He is liable to gst registration?

    He is individual firm.
    Till he is not get gst number.

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you for refer my article, Regarding your question, here with I am providing my opinion as on today’s act position.
      Q.My brother business is General Construction Services of industrial buildings his total tornover 25 lakhs approx. In the financial year 2019-20.
      Including labour. material all.
      He is liable to gst registration?
      As per GST Law, It comes under Services definition ,so, liable to get GST registration.

  2. Er Ismail Khan says:

    I am a civil engineer & contractor my question is I purchased 1500 plot & construct a house 2bhk 1000 sq.ft for selling purpose what is the liability of gst on me & the purchaser I’m the newest for gst & how to file return monthly or quarterly
    Please help iam total confused approximately plot cost 6lakhs & construction cost 15 lakhs & selling price approximately 23 to 24 lakhs
    Please guide
    Mo: 9422833060

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you for refer my article. Regarding your question, here with I am providing my opinion as per today’s ACT.
      Q.I am a civil engineer & contractor my question is I purchased 1500 plot & construct a house 2bhk 1000 sq.ft for selling purpose what is the liability of GST on me & the purchaser .
      Ans. Sir If you have constructed 2BHK house on your own site for selling purpose, If you sell such building after getting occupancy certificate from the Appropriate authority, GST is not applicable ,because it comes under transfer of Immovable property, so as per Transfer of property Act, GST is not applicable. Other wise if you sell such buildings before getting Occupancy certificate, you are liable to get GST registration and will take Tax invoices with your GST number and claim ITC on such purchases(Purchase from Regular dealer ) and charge GST tax on selling price @ 18% on 2/3 rd share ( exclude 1/3rd cost considered as land cost) . net it come @12% on gross value.
      Q.I’m the newest for gst & how to file return monthly or quarterly,
      Ans; It is depend upon your annual turnover of previous year. If your annual turnover is below 1.5cr has to file quarterly returns of GTSR-1, but GSTR-3B has to file monthly and paid tax monthly.

      Please help i am total confused approximately plot cost 6lakhs & construction cost 15 lakhs & selling price approximately 23 to 24 lakhs

  3. Sanjay says:

    Sir
    I am getting 1st floor of house constructed by contractor. Cost includes material cost of cement, steel etc and labor charges. Please advise if GST is charged on both Materials and Labor or is it only for labor.
    If I am getting it constructed myself , will there be any GST

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you for refer my article, Regarding your question, here with I am providing my opinion as below:
      Q.I am getting 1st floor of house constructed by contractor. Cost includes material cost of cement, steel etc and labor charges. Please advise if GST is charged on both Materials and Labor or is it only for labor.
      Ans: Sir, I have refer the above question. If you have purchased flat in 1st floor, before come to the concluding that whether you have purchased such flat after getting occupancy certificate or completion certificate from the appropriate authority, under that circumstances GST is not applicable, other wise if you have purchase under construction i.e. prior to getting occupancy certificate or completion certificate GST is applicable. Regarding GST rate is applicable on different circumstances.i.e RREP or REP (Plint area basis and city).
      Q.2If I am getting it constructed myself , will there be any GST.
      Ans: In the regard if you are getting such house by your self i.e. all the materials are on your name and labour charges paid by your self, No GST is applicable. Regarding labour component such labour contractor is having GST registration , he is liable to pay GST on such labour component and will be collect from you.

  4. Kratika says:

    What is the GST tax rate on the contractor involved in construction of building and does ITC is available to him and to what extent?

    1. B.S.SeethapathiRao says:

      Good morning sir. Firstly I am sorry for delay respond because I was hospitalised due to Carona Positive, Today I have completed 28 days.so, I have referred your mail.
      Q:Regarding your query:
      What is the GST tax rate on the contractor involved in construction of building and does ITC is available to him and to what extent?
      Ans: GST Rate is 18%. Regarding ITC. ITC is available to the extent of Invoices available from Registered taxable persons and there is a restriction on input services and capital goods as per provisions of Sec 54 of CGST Act.

  5. Anil Sharma says:

    We are working as Collaborator of Residential Buildings. We construct Residential Units (Floors) in Delhi, in lieu to compensate Construction Cost property owners transfer one / two Floors to us.

    We get our construction works through contractors on Cost Plus Profit Basis. (10%). How much GST rate we shall compensate to contractor in this model ??

    In case we are not interested in without input tax credit scheme what will be applicable GST Rate ??

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, I will my reply on monday pl.

    2. B.S.Seethapathi Rao says:

      Dear Sir, thank you for referred my article , here with I am providng my opinion on your issues. Pl refer.
      We are working as Collaborator of Residential Buildings. We construct Residential Units (Floors) in Delhi, in lieu to compensate Construction Cost property owners transfer one / two Floors to us.
      Ans: In my understanding this activity come under the definition of Joint Development Agreement.

      So, Without refer agreement between you and land owner , not possible to give my opinion with my clarity. Provide your mail i.d. I will provide my article on JDA for your clear understanding.

  6. Rajendra sethia says:

    80% supply from registered person will include labour charges or materials only ? Developer is not given labour contract. Please guide.

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, I will my reply on monday pl.

    2. B.S.Seethapathi Rao says:

      Dear Sir, Thank you for refer my article. I have referred your question and my opinion it is works contract , so, liable to GST @18%. Sir, without refer terms and conditions not possible to give opinion.

  7. Sri says:

    Mr. Seethapathi
    could you pl clarify wht GST rate will apply in the follwiing case
    Q1) if i buy plot of land – is there GST applicable and if so what is the rate
    Q2) if i buy land and get a architect / contractor to nuild house for my own residential use – is there GST applicable and if so what is the rate
    Q3) if teh seller of the plot themselves build my house – is there GST applicable and if so what is the rate

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, I will my reply on 3.9.20 pl.

    2. B.S.Seethapathi Rao says:

      Dear Sir/ Madam, Thank you for refer my article. Here with I am providing opinion on your issues. Pl refer.

      Q1) if i buy plot of land – is there GST applicable and if so what is the rate.
      Ans, If you buy plot of land – GST is not applicable in sale of plot. Because it is immovable property.
      Q2) if i buy land and get a architect / contractor to build house for my own residential use – is there GST applicable and if so what is the rate.
      Ans. If you buy land and get a architect/ contractor to build house for your own residential use. GST is applicable and liable to pay by your contractor because he is a service provider ( Works Contractor) and GST rate is applicable @18%.
      Q3) if the seller of the plot themselves build my house – is there GST applicable and if so what is the rate.
      Ans: If the seller of the plot themselves build your house and get registration after completion of building and after receiving Completion certificate from the appropriate authority no GST is applicable or if your contractor registered such building under construction then GST is applicable and rate of tax @18% but excluding undivided share of land the effective rate is @12% only.

  8. Harsha says:

    Dear Sir,
    We are apartment association and our turnover exceeds 20 lakhs but monthly maintenance is less that 7500. But we do have commercial activities going on in the residential complex and turn over is less than 20 lakhs. Should we need GST registration for the apartment association.

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, I will my reply on monday pl.

    2. B.S.Seethapathi Rao says:

      Dear Sir, I have referred your issue. In my opinion,If the aggregate turnover i.e. annual receipts of the association does not exceed Rs.20 lakhs in a financial year, If maintenance charges are below Rs.7,500/- it shall not be required to take registration, If the amount of maintenance charges exceeds Rs.7,500/- per month per member, liable to pay GST and take registration.

  9. anshu agarwal says:

    as per section 7(1A) of CGST Act 2017 as amended vide CGST (Amendment Act ) 2018, any activity which passes test of section 7(1), should be referred to schedule II.
    “7(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.]”

    I have a doubt, that how construction of buildings is covered within the scope of supply? As it is neither covered in section 7(1) nor covered in schedule I.

    Probably there is some loophole in the GST law regarding covering construction activities within the scope of supply.

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, I will my reply on 4.9.20, pl.

    1. B.S.SeethapathiRao says:

      Sir Good Morning. Firstly I am sorry for not respond to your query, because I was hospitalised due to Carona Positive . Today I have discharged and referred your mail.Sir, Regarding your query , here with I am giving my opinion.
      Q: What is the GST rate for Individual Residential building contractor, who is constructing house in parties land ?
      Ans. GST rate is 18% .

  10. Aswani kumar says:

    Sir
    I am a gst registered building contractor which is my gst rate 18percentage or 12 percentage for getting input tax credit
    Please clarify

    1. B.S.SeethapathiRao says:

      Dear Sir, I have referred your mail today because I have hospitalised due to Carona Positive. Today I have discharged and referred your mail. Regarding your query here with I am giving my opinion.
      Q.I am a gst registered building contractor which is my gst rate 18percentage or 12 percentage for getting input tax credit.
      Ans: Your GST rate is 18% and eligible for ITC on inward goods and not eligible for inward supply of services and capital goods as per Provision of Sec.54 of CGST Act.

  11. P V V PRASADA RAO says:

    NOTES ON REVERSAL OF TRAN-1 CREDIT IN RESPECT OF CONSTRUCTION OF RESIDENTIAL COMLEX SERVICE. A TAX PAYER HAS AVAILED CENVAT CREDIT THROUGH TRAN-1. DEPT., HAS ASKED TO REVERSE THE AVAILMENT OF CENVAT CREDIT. DETAILS PLEASE.

    1. B.S.Seethapathi Rao says:

      Dear Sir, In my opinion you are not allowed to claim Cenvat Credit on building construction. If you are a contractor and entered an agreement for construction prior to GST implementation and you have completed work partially and you have closing stock, finished stock,then you are eligible to claim Cenvat but as a owner of the building not allowed to claim CENVAT Credit.

  12. H. S. VIJAY says:

    1. What is the GST applicable on Govt. Contracts?
    2. All SR’s say that GST applicable is 12%. But when labour component is added then it is automatically calls for 18%.
    3. Why HSN codes are not made applied to Govt. Contracts?
    Please clarify.
    Regards.
    H. S. Vijay

    1. B.S.Seethapathi Rao says:

      1. What is the GST applicable on Govt. Contracts?
      Ans.The applicable GST rate is @12% as per notification no. 46/2017,w.e.f 15.11.2017.
      2. All SR’s say that GST applicable is 12%. But when labour component is added then it is automatically calls for 18%.
      Ans.Refer the above mentioned notification no.46/2017 – Central Tax (Rate ) dated.14.11.2017 w.e.f 15.11.2017
      3. Why HSN codes are not made applied to Govt. Contracts?
      Ans : HSN CODE for government contracts is 9954

  13. Saurabh shrivastava says:

    Very nice post .Sir please clarify can we take gst refund or adjust with current year liabilities which we have deposited before 31 mar 19

    1. B.S.Seethapathi Rao says:

      Sir, I have referred your comments but you have not mentioned about your capacity either works contractor or end user. in my opinion If you are a works contractor, you are having credit at the end of the year you are eligible to claim refund.

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