Question

Any notification for 8% GST on affordable housing project or clarification about affordable housing project

Answer

Notification No. 08/2017- Integrated Tax (Rate) vide s.no. 3(v) provides tax @ 12% on following services:

(v ) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,-

(a) railways, including monorail and metro;

(b) a single residential unit otherwise than as a part of a residential complex;

(c) low - cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban
Poverty Alleviation, Government of India;

(d) low cost houses up to a carpet area 60 square metres per house in a housing project approved by the competent authority under -

(1) the 'Affordable Housing in Partnership' component of the Housing for All (Urban) Mission /Pradhan Mantri Awas Yojana;
(2) any housing scheme of a State Government ;

(da) low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F. No. 13/6/2009-INF, dated the 30th March,2017

(e) post - harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or

(f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.

Further Explanation 2 provides that In case of supply of service specified in column (3), in item (i); sub-item (b), sub-item (c), sub-item (d), sub-item (da) and sub-item (db) of item (iv); sub-item (b), sub-item (c), sub-item (d) and sub-item (da) of item (v); and sub-item (c) of item (vi), against serial number 3 of the Table above, involving transfer of land or undivided share of land, as the case may be, the value of such supply shall be equivalent to the total amount charged for such supply less the value of transfer of land or undivided share of land, as the case may be, and the value of such transfer of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply.

As per above notification the taxable value will become two third of total value of supply. But there is no such notification that provides rate of 8%. However in general it is said that effective rate of tax is 8% i.e. [12% - 4% (1/3rd of 12%)]. (Reply dt.07/08/2018)