Concessional Rate of Tax for Construction of Affordable Residential Apartments applicable only to Promoters, not Sub-Contractors: AAR [Read Order]
![Concessional Rate of Tax for Construction of Affordable Residential Apartments applicable only to Promoters, not Sub-Contractors: AAR [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/06/Constriction-Residential-Apartments-Promoters-Sub-Contractors-AAR-taxscan.jpg "Concessional Rate of Tax for Construction of Affordable Residential Apartments applicable only to Promoters, not Sub-Contractors: AAR [Read Order]")
The Karnataka Authority of Advance Ruling (AAR) has held that concessional rate of tax for constriction of affordable residential apartments applicable only to promoters not sub-contractors. The applicant, M/s OM Construction Company, engaged in the business of construction of residential apartments as a sub-contractor. The applicant entered into an agreement of memorandum of...
The Karnataka Authority of Advance Ruling (AAR) has held that concessional rate of tax for constriction of affordable residential apartments applicable only to promoters not sub-contractors.
The applicant, M/s OM Construction Company, engaged in the business of construction of residential apartments as a sub-contractor. The applicant entered into an agreement of memorandum of understanding with M/s KG Foundations Pvt. Ltd., for construction of residential project of affordable housing scheme (low-cost housing) for economically weaker sections, as sub-contractor.
The applicant applied before AAR contenting that they are eligible for concessional rate of tax for constriction of affordable residential apartments by a promoter in a Residential Real Estate Project (RREP) as per Notification No. 11/2017 as amended by Notification No. 30/2018 and further amended by 3/2019.
The Authority observed that as per the said Notification the concessional rate of tax applicable only to the promotor in respect of the construction of affordable residential apartments in a Residential Real Estate Project which commences on 1st April, 2019. The Authority further observed that the applicant is not a promoter but only a sub-contractor.
The Coram of Dr. M. P. Ravi Prasad, Member (State) and Mr. T. Kiran Reddy, Member (Central) has held that the Notification No. 11/2017 as amended by Notification No. 30/2018 is not applicable to the applicant who is one of the sun-contractor to the builder or developer or contractor of affordable housing under PMAY Scheme.
The Authority further held that the concessional rate of 0.75% as entry No. 3(i) of the Notification No. 11/2017 as amended by 3/2019 is not applicable to the applicant as the said entry is applicable only to the promoters, but not to the sub-contractors.
To Read the full text of the Order CLICK HERE
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