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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON TREATMENT OF VARIOUS AFFORDABLE HOUSING SCHEMES POST 01.04.2019 PART-6:-

GST UPDATE ON TREATMENT OF VARIOUS AFFORDABLE HOUSING SCHEMES POST 01.04.2019 PART-6:-

GST UPDATE ON TREATMENT OF VARIOUS AFFORDABLE HOUSING SCHEMES POST 01.04.2019 PART-6:-
 
In earlier update, we have discussed about the GST rates on various affordable housing schemes post implementation of new scheme for real estate sector w.e.f. 01.04.2019. It was concluded that only the ongoing projects covered under various schemes of affordable housing such as credit linked subsidy scheme for EWS/LIG, Jawaharlal Nehru National Urban Renewal Mission of Rajiv Awas Yojana etc. will be considered as ‘affordable residential apartment’ liable to GST rate of 1%. The new projects will be eligible to concessional GST rate of 1% only if the criteria of 60/90 sq meters + Rs. 45 Lakhs is satisfied. If the criteria is not satisfied, the projects commenced on or after 01.04.2019, even if covered under various affordable schemes would be liable to GST rate of 5% applicable for “construction of apartments other than affordable residential apartments”. In the present update, we will discuss certain other issues such as what will be the GST rate applicable for contractors providing construction services to the promoter in above cases and the amended entries at serial no. 3(iv), 3(v) and 3(vi) of the notification no. 11/2017-Central Tax (Rate) dated 28.06.2017.
 
The answer to the question regarding the rate of GST applicable to the contractor providing services to the developer with respect to affordable residential apartments lies in entry 3 (va) inserted vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. The said entry states that composite supply of works contract by way of construction/renovation/alteration of affordable residential apartments for which promoter has not opted to pay GST at old rates will be liable to GST at the rate of 12%. However, the condition required to be satisfied for availing concessional rate of 12% is that the carpet area of affordable residential apartments should not be less than 50% of the total carpet area of all the apartments in the project. Moreover, if it is found that the condition of carpet area of 50% affordable residential apartments is not satisfied, the promoter will be liable to pay the differential GST under reverse charge mechanism as if the applicable GST rate was 18%. This will again be hardship for the promoters as the sub-contractor with respect to affordable residential apartments would charge GST at the rate of 12% whereas the GST payable by the promoter on such affordable residential apartments is 1% to be paid in cash. Furthermore, on violation of the condition as regards 50% carpet area for affordable residential apartments, the differential GST would be payable by the builder under reverse charge mechanism in cash thereby ensuring that the concessional GST rate of 12% is applicable only if the contractor provides services with respect to affordable residential apartments constituting at least 50% of the total carpet area of the project.
 
Now, coming to the another aspect regarding amendment made in the entries 3(iv), 3(v) and 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. We submit that the opening paragraph of the above entries has been amended to read as follows:-
Serial No. Description of services CGST
Rate
3(iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) .......................
(b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission of Rajiv Awas Yojana;
(c) ....................		 6
3(v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above,, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,-
(a)................
(b) a single residential unit otherwise than as a part of a residential complex;
(c)................		 6
3(vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above,, provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –
  1. ...................
  2. .........................
(c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017.		 6
   
If we analyse the simultaneous impact of all amended entries of notification no. 03/2019-Central Tax (Rate) dated 29.03.2019, it is found that entries 3(i), (ia), (ib), (ic), (id), (ie) and (if) all pertain to construction of complex, building, civil structure or part thereof, including complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required by the competent authority or after its first occupation, whichever is earlier. However, the entries 3(iv), 3(v), 3(va) and 3(vi) pertain to composite supply of works contract for construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration. Therefore, there is difference in the said entries. Consequently, the entries 3(iv), 3(v), 3(va) and 3(vi) contain phrase “other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above”. However, in our opinion, the entries 3(iv), 3(v) and 3(va) have been kept intact as these prescribe GST rate for the contractors supplying works contract services in relation to construction/renovation of residential apartments. It is found that the government has provided same GST rates for contractor providing works contract services pertaining to various schemes and the affordable residential apartments as 12%. However, the concessional GST rate of 12% is subject to condition that 50% of the carpet area pertains to affordable residential apartments whereas there is no such condition with respect to projects covered under other schemes. This surely creates discrimination as regards works contract services provided by the contractor with respect to various other housing schemes because concessional GST rate of 12% applies without any condition. It is also worth observing that the new projects started on or after 01.04.2019 under the aforesaid housing schemes are not considered as ‘affordable residential apartments’ but still the contractors would enjoy unconditional concessional GST rate of 12% on such projects.   
This is solely for the educational purpose.
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