The West Bengal Authority of Advance Ruling (AAR) ruled that no reduced GST on flats having carpet area not exceeding 60 sq.meter in metropolitan cities or 90 sq. meter in cities, as not covered under Affordable Residential Apartment.
The applicant, Pioneer Associates is stated to be engaged in the business of construction of residential flats. The applicant submits that he has some ongoing projects construction of which had started before 01.04.2019 and the applicant has opted to pay tax at old GST rates in respect of such ongoing projects. The definition of “affordable residential apartment” has been changed w.e.f. 01.04.2019 vide Notification No.03/2019-Central Tax (Rate) dated 29.03.2019.
The applicant has sought the advanced ruling on the issue whether this new definition is applicable in respect of flats (having carpet area of 60 sqm and value up to Rs. 45 lacs) of ongoing projects and collect tax @ 8% on all advances received after 01.04.2019 where 1st booking money received after 01.04.2019; and 1st booking money received before 01.04.2019.
The coram of members Brajesh Kumar Singh and Joyjit Banik ruled that the definition of “affordable residential apartment” is not applicable in respect of flats having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty five lakhs rupees, in an ongoing project in respect of which the promoter has exercised option to pay tax at old GST rates.
“Where a promoter exercises option in Annexure-IV to pay tax at the rate as specified for item (ie) or (if) against serial number 3 of the Notification No. 3/2019 – Central Tax (Rate) dated 29.03.2019, there is no scope to pay tax at a reduced rate of 1% or 5% (effective rate), as the case may,” the AAR added.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
