Maharashtra AAR held a contractor (applicant) eligible for concessional rate of 12% [CGST+SGST] under ‘Affordable Housing’ project (AHP) as per Sr. No. 3(v)(da) of Notification 01/2018-Central Tax (Rate) dated January 25, 2018, covered under Heading 9954 as ‘Construction services’, for residential units of up to 60 sq. mtrs. and not for commercial units.
It noted that the applicant proposed to enter into a housing project with Puranik Builders (Developer) for construction of a residential project having 322505 sq. mtrs. total FSI, out of which 98.5% sq. mtrs. of FSI was to be consumed for flats having carpet area below 60 sq. mtrs.
The AAR stated that applicant’s project falls under the definition of AHP as per Sl.no 3(v)(da) of Notification No. 1/2018-Central Tax (Rate) and clarification issued by Govt. vide F. No. 354/52/2018-TRU, accordingly, holds the applicant eligible for benefit of reduced rate in cases of supply effected after January 25, 2018.
Furthermore, it clarified that in the case of other flats which have carpet above 60 sq. mtrs. or commercial units, the GST would be applicable at a normal applicable rate without any benefit, while referring to Maharashtra AAR ruling in Prajapati Developers.
Accepting applicant’s submission that Sr.no 3 (v)(da) of Notification 01/2018 nowhere restricts the benefit to a ‘developer’ only, AAR clarified that the Notification entry is qua supply of service and not qua the person and therefore once project qualifies as an AHP, the benefit of concessional rate would be available in respect of works contract services pertaining to Low-Cost Houses irrespective of it being supplied by the Developer or the Contractor.