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GST Council in the 34th meeting held on 19th March, 2019 at New Delhi discussed the operational details for implementation of lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. To give effects to the recommendations of the Council, Central Government has issued various Notifications on 29th March, 2019. Out of these notifications, Notification No. 03/2019-Central Tax (Rate) is the most exhaustive & complicated notification containing 27 pages. The best efforts has been taken here to simplify the contents of the said notification in abridged manner for the readers of this information. The said notification is also attached herewith for readers reference.
| Sr. No. | Major Head | Particulars / Description |
| I | Definitions / Meanings : | |
| 1 | Affordable Residential Apartment | A residential apartment in a project having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty five lakhs rupees. |
| 2 | Metropolitan Cities | 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 |
| 3 | Gross Amount Charged | A. Consideration charged towards construction
B. Amount charged for the transfer of land 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. |
| 4 | Apartment Meaning | “apartment” whether called block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit, tenement, unit or by any other name, means a separate and 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, showroom or godown or for carrying on any business, occupation, profession or trade, or for any other type of use ancillary to the purpose specified; |
| 5 | Residential Real Estate Project (RREP) | 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 per cent. of the total carpet area of all the apartments in the REP. |
| 6 | Real Estate Project (REP) | “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 apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, 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; |
| 7 | Carpet Area | “Carpet Area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas 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. |
| 8 | Residential Apartment | “Residential apartment” shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority; |
| 9 | Commercial Apartment | “Commercial apartment” shall mean an apartment other than a residential apartment |
| 10 | Ongoing Project | Commencement Certificate in respect of the project issued by the competent authority on or before 31st March, 2019, it is certified by the Architect that construction of the project has started on or before 31st March, 2019 and completion certificate has not been issued or first occupation of the project has not taken place on or before the 31st March, 2019; |
| 11 | Other than Ongoing Project | “project which commences on or after 1st April, 2019” shall mean a project other than an ongoing project |
| 12 | Floor Space Index | “floor space index (FSI)” shall mean 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.” |
| 13 | Percentage of Completion of Construction | % Completion of construction as on 31st March, 2019” shall be the same as declared to the Real Estate Regulatory Authority in terms of section 4 and section 11 of Real Estate (Regulation and Development) Act, 2016 (16 of 2016) and where the same is not required to be declared to the Real Estate Regulatory Authority, it shall be got determined and certified by an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972) or a chartered engineer registered with the Institution of Engineers (India). |
| II | New GST Scheme – Applicable Rate of GST & Conditions to be Satisfied | |
| a | Applicable Rate of GST | |
| 1 | GST 1% (CGST 0.50% & SGST 0.50%) ( After considering 1/3 deduction on account of transfer of land) | Construction of affordable residential apartments by a promoter in a REP or RREP which commences on or after 1st April, 2019 or in an ongoing RREP opting new scheme except where the entire consideration has been received after issuance of completion certificate. |
| 2 | GST 5% (CGST 2.50% & SGST 2.50% ) ( After considering 1/3 deduction on account of transfer of land) | Construction of residential apartments other than affordable residential apartments by a promoter in a REP or RREP which commences on or after 1st April, 2019 or in an ongoing RREP opting new scheme except where the entire consideration has been received after issuance of completion certificate. |
| Construction of commercial apartments (shops, offices, godowns etc.) by a promoter in an RREP which commences on or after 1st April, 2019 or in an ongoing RREP opting new scheme except where the entire consideration has been received after issuance of completion certificate. | ||
| b | Conditions to be Satisfied | |
| 1 | GST Liability to be Actually Paid-No ITC | Provided that the central tax at the rate specified shall be paid in cash, that is, by debiting the electronic cash ledger only; |
| 2 | No Input Tax Credit (ITC) | Provided also that credit of input tax charged on goods and services used in supplying the service has not been taken except to the extent allowed by this notification |
| 3 | Reversal of Input Tax Credit (ITC) | Provided that the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an amount equivalent to the input tax credit attributable to construction in a project, time of supply of which is on or after 1st April, 2019, which shall be calculated in the manner as prescribed & be reversed before the due date for furnishing of the return for the month of September following the end of financial year 2018-19 |
| 4 | 80% Supplies from Registered Dealer only | Provided also that eighty percent of value of input and input services, [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only; |
| 5 | RCM to be treated as Registered Supplies | Provided also that inputs and input services on which tax is paid on reverse charge basis shall be deemed to have been purchased from registered person; |
| 6 | Shortfall in 80% – Tax shall be paid by RCM at 18% on Shortfall | Provided also that where value of input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of completion certificate or first occupation of the project, whichever is earlier) falls short of the said threshold of 80 per cent., tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of eighteen percent on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017) shall apply to him as if he is the person liable for paying the tax in relation to the supply of such goods or services or both; |
| 7 | RCM on URD Cement at 28% | Where cement is received from an unregistered person, the promoter shall pay tax on supply of such cement at the applicable rates on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017), shall apply to him as if he is the person liable for paying the tax in relation to such supply of cement. Tax on cement received from unregistered person shall be paid in the month in which cement is received. |
| 8 | ITC not availed reporting in Return | Input Tax Credit not availed shall be reported every month by reporting the same as ineligible credit in GSTR-3B [Row No. 4 (D)(2)] |
| 9 | Projectwise details of RD & URD supplies and Annual Liability Payment | The promoter shall maintain project wise account of inward supplies from registered and unregistered supplier and calculate tax payments on the shortfall at the end of the financial year and shall submit the same in the prescribed form electronically on the common portal by end of the quarter following the financial year. The tax liability on the shortfall of inward supplies from unregistered person so determined shall be added to his output tax liability in the month not later than the month of June following the end of the financial year. |
| 10 | Transfer of Development Rights against Consideration in Construction | Provided also that where a registered person (landowner- promoter) who transfers development right or FSI (including additional FSI) to a promoter (developer- promoter) against consideration, wholly or partly, in the form of construction of apartments, –
(i) the developer- promoter shall pay tax on supply of construction of apartments to the landowner- promoter, and (ii) such landowner – promoter shall be eligible for credit of taxes charged from him by the developer promoter towards the supply of construction of apartments by developer- promoter to him, provided the landowner- promoter further supplies such apartments to his buyers before issuance of completion certificate or first occupation, whichever is earlier, and pays tax on the same which is not less than the amount of tax charged from him on construction of such apartments by the developer- promoter. |
| Where a registered person transfers development right or FSI (including additional FSI) to a promoter against consideration, wholly or partly, in the form of construction of apartments, the value of construction service in respect of such apartments shall be deemed to be equal to the Total Amount charged for similar apartments in the project from the independent buyers, other than the person transferring the development right or FSI (including additional FSI), nearest to the date on which such development right or FSI (including additional FSI) is transferred to the promoter, less the value of transfer of land, if any, as prescribed in paragraph 2 above. | ||
| “developer- promoter” is a promoter who constructs or converts a building into apartments or develops a plot for sale | ||
| “landowner- promoter” is a promoter who transfers 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. | ||
| III | Existing GST Scheme – Applicable Rate of GST & Conditions to be Satisfied | |
| a | Applicable Rate of GST | |
| 1 | GST 12% ( CGST 6% & SGST 6% ) | Construction of an apartment in an ongoing project under JNNURM, Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban), Economically Weaker Section (EWS) houses, low cost houses etc. in respect of which the promoter has exercised option to pay central tax on construction of apartments at the rates as specified in earlier notifications. |
| 2 | GST 18% ( CGST 9% & SGST 9% ) ( Before Land Deduction ) (After 1/3 deduction on account of transfer of land, effective rate will be 12% ) | Construction of commercial apartments (shops, offices, godowns etc.) by a promoter in a REP other than RREP except where the entire consideration has been received after issuance of completion certificate. |
| Construction of residential apartments in an ongoing project, other than affordable residential apartments, in respect of which the promoter has exercised option to pay central tax on construction of apartments at the rates existing prior to this notification, except where the entire consideration has been received after issuance of completion certificate. | ||
| b | Conditions to be Satisfied | |
| 1 | Exercise option by 10th May, 2019 | Provided that in case of ongoing project, the registered person shall exercise one time option in the Form at Annexure IV to pay central tax on construction of apartments in a project at the rates as specified for item (ie) or (if), as the case may be, by the 10th of May, 2019; |
| 2 | If Option not exercise, new scheme will be applicable | Provided also that where the option is not exercised in Form at annexure IV by the 10th of May, 2019, option to pay tax at the rates as per the new scheme , shall be deemed to have been exercised; |
| 3 | GST will be discharged as per Option opted from 01-04 to 10-5 | Provided also that invoices for supply of the service can be issued during the period from 1st April 2019 to 10th May 2019 before exercising the option, but such invoices shall be in accordance with the option to be exercised |
| IV | WCT Service Supply to the Projects opting new scheme – Applicable GST & Conditions | |
| a | Applicable Rate of GST | |
| 1 | GST 12% (CGST 6% & SGST 6%) | Composite supply of works contract supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of affordable residential apartments in a project which commences on or after 1st April, 2019, or in an ongoing project opting new scheme |
| b | Conditions to be Satisfied | |
| 1 | 50% Carpet Area under Affordable | Provided that carpet area of the affordable residential apartments is not less than 50 per cent. of the total carpet area of all the apartments in the project; |
| 2 | If the 50% condition not satisfied on Project Completion | The recipient of the service, that is, the promoter shall be liable to pay such amount of tax on reverse charge basis as is equal to the difference between the tax payable on the service at the applicable rate but for the rate prescribed herein and the tax actually paid at the rate prescribed herein”; |
| V | Reverse Charge on URD Supplies – Applicable Rate of GST & Conditions | |
| 1 | GST 18% | Supply of services other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI) by an unregistered person to a promoter for construction of a project on which tax is payable by the recipient of the services under sub- section 4 of section 9 of the Central Goods and Services Tax Act, 2017 |
| VI | Calculation of Input tax credit attributable to construction of residential portion in Project having time of supply on or after 01-April-2019 ( Excess Attributable ITC ) | |
| a | Real estate project (REP) other than Residential Real estate project (RREP) | |
| i | Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock | |
| 1 | Excess Attributable ITC | Total ITC availed till 31-3-2019 on inputs & input services ( Less ) [ Eligible Attributable ITC towards Commercial Construction + Eligible Attributable ITC towards Residential Construction having time of supply on or before 31-3-2019] |
| 2 | Eligible Attributable ITC towards Commercial Construction | Total ITC availed till 31-3-2019 * [Commercial Carpet Area / Total Carpet Area] |
| 3 | Eligible Attributable ITC towards Residential Construction | Total ITC Availed till 31-3-19 * Proportion of Residential Carpet Area to Total Carpet Area * Proportion of Booked Carpet Area to Total Residential Carpet Area * Value of Supply of booked residential apartments till 31-3-2019 to total value of supply of all apartments booked till 31-3-2019 * [ 1 / % of completion of construction as on 31-3-2019 ] |
| 4 | Separate calculation of SGST, CGST etc. | The above referred amounts of attributable ITC shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. |
| 5 | Reversal of Excess Attributable ITC | Where, such Excess Attributable ITC is positive, the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an amount equal to the difference between T and Te. Such amount shall form part of the output tax liability of the registered person and the amount shall be furnished in FORM GST ITC- 03 |
| 6 | Eligibility to ITC after 01-04-2019 for Shortfall | Where such Excess Attributable ITC is negative, the registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential portion in the REP, for which he shall not otherwise be eligible, to the extent of shortfall. |
| 7 | Utilisation of ITC attributable to Commercial | The registered person may calculate eligible ITC attributable towards Commercial and utilize credit to the same extent for payment of tax on commercial apartments, till the complete workings are done. |
| 8 | Where % of Completion is Zero | Where percentage completion is zero but ITC has been availed on goods and services received for the project on or prior to 31st March, 2019, in such a case percentage completion shall be taken as the percentage completion certified by an architect by considering the input services received and inputs in stock as on 31st March, 2019. |
| ii | Where % completion as on 31st March, 2019 is zero but invoicing has been done having time of supply before 31st March, 2019, and no input services or inputs have been received as on 31st March, 2019, | |
| 1 | Short Attributable ITC | ITC attributable to construction of commercial portion ( Plus ) ITC attributable to construction of residential portion which has time of supply on or before 31st March, 2019 |
| 2 | Attributable ITC towards Commercial Construction | Tax paid on inputs and input services on which ITC is available received in 2019-20 for construction * [Commercial Carpet Area / Total Carpet Area] |
| 3 | Attributable ITC towards Residential Construction | Tax paid on inputs and input services on which ITC is available received in 2019-20 for construction * Proportion of Residential Carpet Area to Total Carpet Area * Proportion of Booked Carpet Area to Total Residential Carpet Area * Value of Supply of booked residential apartments till 31-3-2019 to total value of supply of all apartments till 31-3-2019 |
| 4 | Eligible to Avail Short Attributable ITC | The registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential portion in the REP, for which he shall not otherwise be eligible, to the extent of the amount of Short Attributable ITC as calculated above. |
| 5 | Separate calculation of SGST, CGST etc. | The amount of Short Attributable ITC shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax |
| iii | Exceptional Circumstances | |
| 1 | % Invoicing more than % Completion by more than 25% | where percentage invoicing is more than the percentage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 per cent. points; the value of percentage invoicing shall be deemed to be percentage completion plus 25 percent. points |
| 2 | Value of Invoices exceed Actual Consideration by more than25% | where the value of invoices issued on or prior to 31st March, 2019 exceeds the consideration actually received on or prior to 31st March, 2019 by more than 25 per cent. of consideration actually received; the value of such invoices for the purpose of determination of percentage invoicing shall be deemed to be actual consideration received plus 25 percent. of the actual consideration received; |
| 3 | Value of Inputs & Input Services exceeds actual consumption of inputs & input services by more than 25% | where, the value of procurement of inputs and input services prior to 1st April, 2019 exceeds the value of actual consumption of the inputs and input services used in the percentage of construction completed as on 31st March, 2019 by more than 25 percent. of value of actual consumption of inputs and input services, the jurisdictional commissioner or any other officer authorized in this regard may fix the attributable ITC towards residential portion based on actual per unit consumption of inputs and input services based on the documents duly certified by a chartered accountant or cost accountant submitted by the promoter in this regard, applying the accepted principles of accounting. |
| b | Residential Real estate project (RREP) | |
| i | Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock | |
| 1 | Excess Attributable ITC | Total ITC availed till 31-3-2019 on inputs & input services (Less) [ Eligible Attributable ITC towards Commercial Construction + Eligible Attributable ITC towards Residential Construction having time of supply on or before 31-3-2019] |
| 2 | Eligible Attributable ITC towards Commercial Construction | Total ITC availed till 31-3-2019 * [Commercial Carpet Area / Total Carpet Area] |
| 3 | Eligible Attributable ITC towards Residential Construction | Total ITC Availed till 31-3-19 * Proportion of Residential & Commercial Carpet Area to Total Carpet Area * Proportion of Booked Residential & Commercial Carpet Area to Total Carpet Area * Value of Supply of booked residential & commercial apartments till 31-3-2019 to total value of supply of all apartments booked till 31-3-2019 * [ 1 / % of completion of construction as on 31-3-2019 ] |
| 4 | Separate calculation of SGST, CGST etc. | The above referred amounts of attributable ITC shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. |
| 5 | Reversal of Excess Attributable ITC | Where, such Excess Attributable ITC is positive, the registered person shall pay, by debit in the electronic credit ledger or electronic cash ledger, an amount equal to the difference between T and Te. Such amount shall form part of the output tax liability of the registered person and the amount shall be furnished in FORM GST ITC- 03 |
| 6 | Eligibility to ITC after 01-04-2019 for Shortfall | Where such Excess Attributable ITC is negative, the registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential & commercial portion in the RREP, for which he shall not otherwise be eligible, to the extent of shortfall. |
| 7 | Where % of Completion is Zero | Where percentage completion is zero but ITC has been availed on goods and services received for the project on or prior to 31st March, 2019, in such a case percentage completion shall be taken as the percentage completion certified by an architect by considering the input services received and inputs in stock as on 31st March, 2019. |
| ii | Where % completion as on 31st March, 2019 is zero but invoicing has been done having time of supply before 31st March, 2019, and no input services or inputs have been received as on 31st March, 2019, | |
| 1 | Short Attributable ITC | ITC attributable to construction of residential & commercial portion which has time of supply on or before 31st March, 2019 |
| 2 | Attributable ITC towards Residential & Commercial Construction | Tax paid on inputs and input services on which ITC is available received in 2019-20 for construction * Proportion of Residential & Commercial Carpet Area to Total Carpet Area * Proportion of Booked Residential & Commercial Carpet Area to Total Carpet Area * Value of Supply of booked residential & commercial apartments till 31-3-2019 to total value of supply of all apartments booked till 31-3-2019 |
| 3 | Eligible to Avail Short Attributable ITC | The registered person shall be eligible to take ITC on goods and services received on or after 1st April, 2019 for construction of residential & commercial portion in the RREP, for which he shall not otherwise be eligible, to the extent of the amount of Short Attributable ITC as calculated above. |
| 4 | Separate calculation of SGST, CGST etc. | The amount of Short Attributable ITC shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax |
| iii | Exceptional Circumstances | |
| 1 | % Invoicing more than % Completion by more than 25% | where percentage invoicing is more than the percentage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 per cent. points; the value of percentage invoicing shall be deemed to be percentage completion plus 25 percent. points |
| 2 | Value of Invoices exceed Actual Consideration by more than25% | where the value of invoices issued on or prior to 31st March, 2019 exceeds the consideration actually received on or prior to 31st March, 2019 by more than 25 per cent. of consideration actually received; the value of such invoices for the purpose of determination of percentage invoicing shall be deemed to be actual consideration received plus 25 percent. of the actual consideration received; |
| 3 | Value of Inputs & Input Services exceeds actual consumption of inputs & input services by more than 25% | where, the value of procurement of inputs and input services prior to 1st April, 2019 exceeds the value of actual consumption of the inputs and input services used in the percentage of construction completed as on 31st March, 2019 by more than 25 percent. of value of actual consumption of inputs and input services, the jurisdictional commissioner or any other officer authorized in this regard may fix the attributable ITC towards residential portion based on actual per unit consumption of inputs and input services based on the documents duly certified by a chartered accountant or cost accountant submitted by the promoter in this regard, applying the accepted principles of accounting. |
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what is gst in other charges in real estate
Will be GST chargeable if I have recognized revenue for a flat in an apartment as the percentage completion is 25% and an advance receipt is just 15% from the respective customer.
Will the GST is applicable on 25% of flat value or 15% of the flat value on which I have paid the GST already.