Notifications and other material 2 NN No Amended Sections Gist 032019CTRate dt 29032019 N No 112017 CT Rate 91 34 111 155 161 amp 148 New rates for Real estate sector ITC ID: 776069
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Slide1
Implication on
Real Estate & other issues in GST (Amendments)
Slide2Notifications and other material
2
NN
No.
Amended
Sections
Gist
03/2019-CT(Rate) ,
dt
. 29-03-2019
N No. 11/2017 - CT (Rate)
9(1), (3),(4), 11(1), 15(5) , 16(1) & 148
New rates for Real estate sector, ITC
calculation
04/2019-CT(Rate) ,
dt
. 29-03-2019
N No. 12/2017 - CT (Rate)
Section 11(1)
Exemption to DR+FSI and LT Lease for residential apartments
05/2019-CT(Rate) ,
dt
. 29-03-2019
N No. 13/2017 - CT (Rate)
Section 9(3)
RCM services: DR+FSI and LT Lease (upfront
+ periodic)
06/2019-CT(Rate) ,
dt
. 29-03-2019
NA
Section 148
Time of supply for DR+FSI, Upfront LT Lease and Construction service to land owner
agst
DR+FSI
07/2019-CT(Rate) ,
dt
. 29-03-2019
NA
Section 9(4)
notify certain services to be taxed under RCM under section 9(4) of CGST Act as recommended by
08/2019-CT(Rate) ,
dt
. 29-03-2019
N No. 1/2017- CT (Rate)
Section 9(1) and 15(5)
notify CGST rate of certain goods as recommended by Goods and Services Tax Council for real estate sector.
16/2019-CT ,
dt
. 29-03-2019
CGST Rules
Section 164
Input
tax credit and others with forms
Order No. 4/2019 – CT
ROD
Section 172
Credit attribution on area basis of the area of the construction
Slide3Highlights of New Scheme
3
Slide4Highlights of New Scheme
4
Slide5Rate Change or Business Change!!
5
Slide6Impact areas on project in Transition and New
6
Slide7Impact on Sale Price of the project
7
Slide8Exclusive GST Contract
8
Particulars
Value
GST
Total
Before 01.04.2019
Cost per sq. ft. of unit
1,200/-
96/- (8%)
1,200/-
Selling Rate per sq. ft. of unit
2,000/-
160/- (8%)
2,160/-
From 01.04.2019
Cost per sq. ft. of unit
1,200/-
96/- (8%)
1296/-
Selling Rate per sq. ft. of unit
2,000/-
20/- (1%)
2,020/-
OR 2,116/-?
Slide9Inclusive GST Contract
9
Particulars
Value
GST
Total
Before 01.04.2019
Cost per sq. ft. of unit
1,200/-
96/- (8%)
1,200/-
Selling Rate per sq. ft. of unit
2,160/-
160/- (8%)
2,160/-
From 01.04.2019
Cost per sq. ft. of unit
1,200/-
96/- (8%)
1296/-
Selling Rate per sq. ft. of unit
2,160/- or 2020/-or 2,116/-
20/- (1%)
2,160/- or 2020/-or 2,116/-
Slide10Concept of Implied Contract
10
Slide11Implied Contract
Section 9 of Contract Act: Promises, express and impliedIn so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.Southern Foundries (1926) Ltd v Shirlaw'Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if while the parties were making their bargain an officious by-stander were to suggest some express provision for it in their agreement, they would testily suppress him with a common, 'Oh, of course'. Section 171 CGST Act: Anti-profiteering measureAny reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
11
Slide12Real Estate Transactions
12
Slide13Real Estate Transactions
13
Slide14Construction Service
14
Slide15Definitions
15
Slide16Affordable Residential Apartment
16
Slide1780IBA v/s GST
17
Slide18Ongoing Project &Project which commences on or after 1st April, 2019
18
Slide19Residential and Commercial Apartment
Residential: an apartment intended for residential use as declared to the RERACommercial: Other than residential
19
Slide20Commencement certificate
The commencement certificate or the building permit or the construction permit, by whatever name called issued by the competent authority to allow or permit the promoter to begin development works on an immovable property, as per the sanctioned plan.
20
Slide21Identify Project!!
21
Slide22Identify Project!!
Multistorey Ltd. has a plot of land admeasuring 6000 sqmt. It had planned to construct 2 towers on it in 2 phases. Phase 1, Construction has been started in January 2018 for first tower, which is under construction as of now. Phase 2, Construction of Second tower will start in January 2020. How many projects are there?
22
Slide23Rates
23
Slide24Rate Summary
24
Slide25Conditions for New Rates
25
Slide26Conditions for New Rates
26
Slide27Condition of 80% Procurement
27
Slide28Conditions for New Rates
28
Slide29Conditions for New Rates: Pay under RCM
29
Slide30Illustration: 1
30
Slide31Illustration 2
31
Slide32Developer & Land owner Condition
32
Slide33Major Types of Development Agreements
33
Slide34Developer Condition w.e.f. 01.04.2019
34
Slide35Land owner Condition w.e.f. 01.04.2019
35
Slide36Rate of tax for Contractors
36
Slide37Composite supply of works contract
37
Slide38Development Rights/ LT Lease
38
Slide39Are Development Rights taxable?
39
Slide40RCM for Promoter [Sec. 9(3)/5(3)]
40
Slide41Exemption for DR/LT Lease
41
Slide42REVERSAL in case of Sale of Units post Completion
42
Slide43Removal of Difficulty Order
43
Slide44Case Studies
44
Slide45Questions
Whether all the apartments in a project has to satisfy the condition of affordable housing in order to avail the concessional effective rate of 1% on the affordable residential apartment?Whether the Landlord be eligible to avail input tax credit on the construction services which are taxable at the effective of rate of 1% and 5% in an on-going project? Whether a sub-contractor or any other person who is only providing construction services and is not involved in sale can claim the above concessional rates of tax?
45
Slide46Gross Amount Charged
Mr. C (builder) sells a residential apartment to Mr. D(before obtaining CC) at Rs. 40 lakhs (excluding GST). He charges an additional amount towards preferential location charges.Comment on GST rate if:Case 1: Preferential charges constitute Rs. 2.75 lakhsCase 2: Preferential charges constitute Rs.8 lakhs
46
Slide47Computation of Reversal
47
Slide48Thank You
48