Real Estate: AAR Clarifies GST Applicability on Ongoing Projects

The Applicant, Raymond Limited- Realty Division, is a promoter of a real estate project called Ten X Habitat. It is spread over 14 acres and has 10 buildings (Towers A to H, J, and K). Each building has 42 floors, including apartments and a few commercial units, less than 15% of the total area of the residential apartments. The project also includes common facilities like a clubhouse, swimming pool, and parking. This whole project is called the Aspirational Project.

All the apartments in the project are small-sized (less than 60 square meters) and would be low-cost. These apartments are being sold for more than Rs 45 lakhs. These are sold before the issuance of the completion certificate by the competent authority or before its first occupation, whichever is earlier.

Questions Asked by Applicant

The applicant filed an application to get an advance ruling for the following questions:

Question: “Whether the Applicant has the option to pay tax at the rate of 12 per cent (6 per cent CGST + 6 per cent MGST) with Input tax credit for supply of residential apartments in all its ten Aspirational towers in terms of item (ie) of Sl. No. of the Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017?”

Advance Ruling Given BY Maharashtra AAR

As per the Maharashtra Authority of Advance Ruling, the applicant cannot apply the 12% GST to all 10 towers. Only Towers A, B, and C meet the definition of an ongoing project as per the GST Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended from time to time. Therefore, the rate specified in this notification applies only to towers A, B and C and only if all other conditions mentioned in the notification are also fulfilled.