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Rate of tax on work contract service.

Rate of Tax The applicant, seeking an advance ruling in respect of the following questions.

Whether the Applicant, being the Contractor at Joyville, Virar, will be eligible for concessional rate of Goods and Service under Entry (v) (da) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.01/2018-Central Tax (Rate) with effect from 25.01.2018 and discharge Goods and Services Tax at the rate of 12%?

Whether the building completion and finishing services be regarded as a separate service or would it be a composite supply of works contract service as covered under entry V(da) of Notification No. 11/2017 to avail the benefit of reduced rate of tax?

What would be the appropriate rate of Goods and Services Tax on works contract services provided for the construction of the units and common areas and amenities on pro-rata basis which do not qualify the criteria of low cost houses’?

Held that :- For reasons as discussed in the body of the order, the questions are answered thus -

Yes. The applicant will be eligible for concessional rate of Goods and Service under Entry (v) (da) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.01/2018-Central Tax (Rate) with effect from 25.01.2018 and discharge Goods and Services Tax at the rate of 12%,in respect of Affordable Housing only, as discussed above.

Building completion and finishing services will not be regarded as a separate services.

In view of the discussions made above, such building completion and finishing services will be a part of composite supply of works contract services with the principal supply of building construction, covered under entry (v)(da) of Notification No. 11/2017 and eligible to avail the benefit of reduced rate of tax @12% GST only in respect of dwelling units having an area of less than 60 sq mtrs.

The rate of GST will be 18% on works contract services provided for the construction of the units, common areas and amenities on pro-rata basis which do not qualify the criteria of low cost houses.— Shapoorji Pallonji And Company Private Limited, In Re… [2019] 19 TAXLOK.COM 108 (AAR-Maharashtra)

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