Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

Comments
Print   |    |  Comment

GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-3

GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-3
GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-3
 
In the earlier update, we had discussed the provisions contained in Annexure I for computation of input tax credit on inputs and input services attributable to the construction of residential portion in a Real Estate Project (REP) in case of ongoing project which has time of supply on or after 01.04.2019. In the present update, we explain the provision with the help of an illustration.
 
Sl. No   Details of a REP (Res + Com)    
       
1 No. of apartments in the project   100 Units
2 No. of residential apartments in the project   75 Units
3 Carpet area of the residential apartment   70 Sqm
4 Total carpet area of the residential apartments C2 * C3 5250 Sqm
5 value of each residential apartment   0.60 Crore
6 Total value of the residential apartments C2 * C5 45.00 Crore
7 No. of commercial apartments in the project   25 Units
8 Carpet area of the commercial apartment   30 Sqm
9 Total carpet area of the commercial apartments C7 * C8 750 Sqm
10 Total carpet area of the project (Resi + Com) C4 + C9 6000 Sqm
11 Percentage completion (Pc) as on 31.03.2019 [as declared to RERA or
determined by chertered engineer]		    
20%		  
12 No of residential apartments booked before transition   40 Units
13 Total carpet area of the residential apartments booked before transition C12 * C3 2800 Sqm
14 Value of booked residential apartments C5 * C12 24 Crore
15  
Percentage invoicing of booked residential apartments on or before 31.03.2019		    
60%		  
16 Total value of supply of residential apartments having t.o.s. prior to transition C14 * C15 14.4 Crore
17 ITC to be reversed on transition, Tx= T- Te      
18 Eligible ITC (Te)= Tc + Tr      
19 T (*see notes below)   1 Crore
20 Tc= T x (carpet area of commercial apartments in the REP/ total carpet area of
commercial and residential apartments in the REP)		 C19 * (C9/ C10) 0.125 Crore
21 Tr= T x F1 x F2 x F3 x F4      
22 F1 C4 / C10 0.875  
23 F2 C13 / C4 0.533  
24 F3 C16 / C14 0.600  
25 F4 1/ C11 5  
26 Tr= T x F1 x F2 x F3 x F4 C19 * C22 * C23 * C24 * C25 1.400 Crore
27 Eligible ITC (Te)=Tc + Tr C26 + C20 1.525 Crore
28 ITC to be reversed/ taken on transition, Tx= T- Te C19 - C27 -0.525 Crore
 
29 Tx after application of cap on % invoicing vis-a-vis Pc      
30 % completion   20%  
31 % invoicing   60%  
32 % invoicing after application of cap(Pc + 25%) C11+25% 45%  
33 Total value of supply of residential apartments having t.o.s. prior to transition C14*C32 10.80 Crore
34 F3 after application of cap C33/C14 0.45  
35 Tr= T x F1 x F2 x F3 x F4 (after application of cap) C19 * C22 * C23 * C34 * C25 1.05 Crore
36 Eligible ITC (Te)=Tc + Tr (after application of cap) C20 + C35 1.18 Crore
37 ITC to be reversed / taken on transition, Tx= T- Te (after application of cap) C19 - C36 -0.18 Crore
 
38 Tx after application of cap on % invoicing vis-a-vis Pc and payment realisation      
39 % invoicing after application of cap(Pc + 25%)   45%  
40 Total value of supply of residential apartments having t.o.s. prior to transition C33 10.80 Crore
41 Consideration received   8.00 Crore
42 Total value of supply of residential apartments having t.o.s. prior to transition
after application of cap vis-a-vis consideration received		 8 cr + 25% of 8 Cr 10.00 Crore
43 F3 after application of both the caps C42 / C14 0.42  
44 Tr= T x F1 x F2 x F3 x F4 (after application of both the caps) C19 * C22 * C23 * C43 * C25 0.97  
45 Eligible ITC (Te)=Tc + Tr (after application of both the caps) C20 + C44 1.10  
46 ITC to be reversed / taken on transition, Tx= T- Te (after application of both the
caps)		  
C19 - C45		  
-0.10		 Crore
           
 
The calculation is self explanatory as per the provisions discussed in our earlier update. However, one point that is worth observing is that paragraph 3 of the notification starts with non-obstante clause wherein it overrides the provisions contained in paragraph no. 2 of the notification. The final computation as per paragraph no. 2 of the notification is mentioned at serial no. 28 of the table. However, the situations prescribed at paragraph no. 3(i) and 3(ii) are also illustrated in the above example. The value of Tx in situation 3(i) is mentioned at serial no. 37 of the table while that covered by situation 3(ii) is mentioned at serial no. 46 of the table. If we discuss the computation covering situation no. 3(i) wherein the percentage invoicing (60%) is more than percentage completion (20%), it is found that the % of invoicing is to be taken as (20%+25%)= 45%. This will result in re-computation of F3 and Tx to be -0.18 Crores meaning that the developer promoter is eligible to avail the credit of 18 Lakhs in situation no. 3(i). Similarly, F3 is individually re-computed in situation 3(ii) with Tx as -0.10 Crores, it means that the developer promoter is eligible to avail the credit of Rs. 10 Lakhs in situation no. 3(ii). Now, the illustration of the notification assumes that the situation 3(i) and 3(ii) are mutually exclusive but it is possible that the developer is covered by both the situations. Accordingly, it is not clear as to the situation that is to have precedence while computing the value of Tx. Moreover, it is also not suggested that which Tx is to be considered finally by the developer promoter if he is covered by both situations 3(i) and 3(ii). The revenue authorities will definitely insist for the Tx with the lowest value as in the present case, the Tx indicates availment of credit by the developer promoter whereas the assessee will chose the Tx with highest value. A suitable clarification is expected by the government so that unnecessary dispute is avoided in future.   
This is solely for the educational purpose.
You can reach us at www.capradeepjain.com, at our facebook page on
https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on Twitter at https://www.twitter.com/@capradeepjain21

Post a Comment
Department News


Query
 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com