Rate of tax (service)- In the instant case, the applicant is engaged in the business of civil construction of residential premises and supplying Works Contract' service as a sub-contractor to the main contractor (builder), who provides works contract service to construct affordable housing under PMAY scheme for the Economically Weaker Sections.

The applicant has sought advance ruling in respect of the following questions:-

i. The applicability of Serial No.3(i) of Notification No.03/2019-Central Tax (Rate) New Delhi, the 29th March, 2019 (parent Notification No. 11/2017-Central Tax (Rate), dated the 28th June, 2017 as amended by Notification No.30/2018-Central Tax (Rate), dated the 31st December, 2018 to the applicant who is one of the sub-contractors to the builder / Developer / Contractor of Affordable housing under PMAY Scheme.

ii. Eligibility of concessional rate of CGST at 0.75% as per the Notification No.03/2019-Central Tax (Rate) New Delhi, the 29th March, 2019 amended from time to time.

It is observed that the applicant has entered into an agreement of memorandum of understanding with M/s K.G Foundations Private Limited, Chennai for the construction of residential apartments as a sub-contractor.

The applicant contends that they are eligible to avail the concession rate of tax @ 0.75% after deduction of 1/3 of the land cost on money consideration received from the prospective buyer as per Sl.No.3(i) of the Notification No. 03/2019-Central Tax (Rate) dated 29th March, 2019, which is an amendment to the entry number 3 of the principal notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

It could be seen from the column 3 (description of the service) of entry number 3(i) of the principal notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended by the Notification No.3/2019-Central Tax (Rate) dated 29.03.2019, effective from 01.04.2019 that, the concessional rate of 0.75% CGST is applicable only to the promoter in respect of the Construction of affordable residential apartments in a Residential Real Estate Project (herein after referred to as RREP) which commences on or after 1st April, 2019.

Held that- In the instant case it is an admitted fact that the applicant is not a promoter but a sub-contractor and hence the benefit of the said entry i.e. concessional rate of GST of 0.75%, for the proposed construction, is not applicable to the applicant.