Rate of tax (service)— In the instant case, the applicant is a Partnership firm engaged in the development and construction of residential apartments in the State of Kerala.
The Applicant requested an advance ruling on the following:
Whether the rate of 0.75% under Item No. (i) of Entry No. 3 of Notification No. 03/2019 Central Tax (Rate) can be availed in respect of those units which qualify as “Affordable Residential Apartment” in a “Residential Real Estate Project” when the project consists of both “Affordable Residential Apartments” as well as apartments other than Affordable Residential Apartments?
The applicant is engaged in the development and construction of residential apartments. The question to be answered is regarding the rate of GST applicable in respect of the construction of “Affordable Residential Apartments” in a Residential Real Estate Project [RREP] having both “Affordable Residential Apartments” and “Other than Affordable Residential Apartments” as per the rate Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended by Notification No.03/2019 Central Tax (Rate) dated 29.03.2019 with effect from 01.04.2019.
On a combined reading of the entries at Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and the definitions as extracted above, it is evident that the rate of GST prescribed under the entry' at Item (i) applies to the construction of affordable residential apartments and under the entry at Item (ia) applies to the construction of residential apartments other than affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer except where the entire consideration is received after issuance of completion certificate. Hence the rates are prescribed for the construction services of different categories of individual apartments in residential real estate and the rate as prescribed in Item (i) and (ia) shall apply to each apartment in the residential real project according to the category under which it is classified.
Held that— The applicant is liable to pay GST at the rate of 1.5% [0.75% - CGST + 0.75% - SGST] in respect of the services of construction of affordable residential apartments as per entry at Item (i) and the rate of 7.5% [3.75% -CGST + 3.75% - SGST] in respect of the services of construction of residential apartments other than affordable residential apartments as per entry at Item No. (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 in the Residential Real Estate Project subject to the conditions prescribed under the respective entries.