In re ICLOUD Homes Private Ltd (GST AAR Kerala)
Summary: The Kerala Authority for Advance Ruling considered the classification, GST rate and input tax credit consequences for residential villa projects of M/s. ICLOUD Homes Private Limited commencing on or after 01.04.2019, along with additional modification works undertaken for villa buyers.
The applicant constructed villas and apartments in Thiruvananthapuram and had earlier exercised the option available for qualifying “ongoing projects” to continue under the pre-01.04.2019 rate structure with input tax credit. The present ruling, however, concerned separate projects commencing on or after 01.04.2019, namely “Winds of Change – Phase II” and “The 44 Club – Phase II”, which did not qualify as ongoing projects.
The Authority held that residential villas in these Residential Real Estate Projects (RREP), other than affordable residential apartments, are classifiable under SAC 995411—General construction services of single dwelling or multi-dwelling or multi-storied residential buildings—and fall under Entry 3(ia) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The notified rate under Entry 3(ia) is 3.75% CGST plus corresponding SGST. Where the supply involves transfer of land or undivided share of land, paragraph 2 of the notification deems one-third of the total amount charged as attributable to land.
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