On October 19, 2023, the Ministry of Finance, Department of Revenue, Government of India, issued Notification No. 15/2023-Union Territory Tax (Rate). This notification brings about significant changes to Union Territory tax rates. The amendments focus on the construction of a complex, building, or part thereof, intended for sale to a buyer. This article provides a detailed analysis of these amendments and their implications.
Detailed Analysis:
1. Amendments to Schedule II of the Central Goods and Services Tax Act: Notification No. 15/2023 introduces key changes in the opening paragraph, replacing the words related to Schedule II of the Central Goods and Services Tax Act. The new language specifically relates to the construction of a complex, building, or part thereof, intended for sale to a buyer. It includes instances where the service recipient’s payment covers the land’s value or undivided share of land, except when the full consideration is received after the issuance of a completion certificate or after the first occupation, whichever occurs earlier.
2. Effective Date: These amendments will come into effect on October 20, 2023.
Conclusion:
Notification No. 15/2023-Union Territory Tax (Rate) represents a significant step in the government’s efforts to streamline tax regulations, particularly in the context of construction services intended for sale to buyers. These amendments aim to bring clarity and consistency to the taxation of such services.
By revising the language in the opening paragraph, the government has eliminated potential ambiguities and established a clear framework for taxing construction services. It provides specific conditions under which the land value or undivided share of land is included in the service recipient’s payment. Moreover, the exception regarding the issuance of a completion certificate or first occupation ensures that the tax treatment is aligned with the progress of the construction project.
This notification is crucial for businesses, individuals, and government entities involved in the construction and real estate sectors. Understanding and complying with the updated provisions is essential to avoid tax-related issues and to ensure adherence to the law.
In summary, Notification No. 15/2023-Union Territory Tax (Rate) represents a positive development in India’s tax system, promoting transparency and efficiency in the taxation of construction services. The government’s commitment to ensuring clarity and consistency in tax regulations is evident in these amendments. All relevant parties should stay informed and adapt their practices to align with the updated tax provisions.
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 15/2023-Union Territory Tax (Rate) | Dated : 19th October, 2023
G.S.R. 770(E).-In exercise of the powers conferred by clause (xiv) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 15/2017- Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 706(E), dated the 28th June, 2017, namely:-
In the said notification, in opening paragraph , for the words, brackets, letters and figures “specified in sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act”, the words, “of construction of a complex, building or a part thereof, intended for sale to a buyer, wholly or partly, where the amount charged from the recipient of service includes the value of land or undivided share of land, as the case may be, 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”, shall be substituted.
2. This notification shall come into force with effect from the 20th October, 2023.
[F.No. CBIC-1 90354/1 95/2023-TO (TRU-I I)-CBEC]
(Rajeev Ranjan)
Under Secretary to the Government of India
Note:-The principal No. 15/2017- Union Territory Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S. R. 706(E) ,dated the 28th June, 2017.
