Notification No. 04/2019-Integrated Tax (Rate) [N10-G2N]

In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.9/2017- Integrated Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 684 (E), dated the 28th June, 2017, namely:-

In the said notification, -

(i) in the opening paragraph, for the word, brackets and figures “sub-section (1) of section 6” the word, brackets and figures “, sub-section (3) and sub-section (4) of section 5, sub-section (1) of section 6 and clause (xxv) section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), read with sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017);

(ii) in the Table, -

(a) after serial number 43 and the entries relating thereto, the following serial numbers and entries shall be inserted, namely: -

(1) (2) (3) (4) (5) “43A Heading Service by way of Nil Provided that the promoter shall be liable to 9972 transfer of development pay tax at the applicable rate, on reverse rights (herein refer charge basis, on such proportion of value of TDR) or Floor Space development rights, or FSI (including Index (FSI) (including additional FSI), or both, as is attributable to additional FSI) on or the residential apartments, which remain un- st after 1 April, 2019 for booked on the date of issuance of completion construction of certificate, or first occupation of the project, residential apartments as the case may be, in the following manner - by a promoter in a project, intended for sale [GST payable on TDR or FSI (including to a buyer, wholly or additional FSI) or both for construction partly, except where the of the residential apartments in the entire consideration has project but for the exemption contained been received after herein] x (carpet area of the residential issuance of completion apartments in the project which remain

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certificate, where un- booked on the date of issuance of required, by the completion certificate or first occupation competent authority or ÷ Total carpet area of the residential after its first occupation, apartments in the project) whichever is earlier.

The amount of GST Provided further that tax payable in terms of exemption available for the first proviso hereinabove shall not exceed construction of 1 per cent. of the value in case of affordable residential apartments in residential apartments and 5 per cent. of the the project under this value in case of residential apartments other notification shall be than affordable residential apartments calculated as under: remaining un- booked on the date of issuance [GST payable on TDR of completion certificate or first occupation or FSI (including The liability to pay integrated tax on the said additional FSI) or both portion of the development rights or FSI, or for construction of the both, calculated as above, shall arise on the project] x (carpet area of date of completion or first occupation of the the residential project, as the case may be, whichever is apartments in the project earlier. ÷ Total carpet area of the residential and commercial apartments in the project ) 43B Heading Upfront amount (called Nil Provided that the promoter shall be liable to 9972 as premium, salami, pay tax at the applicable rate, on reverse cost, price, development charge basis, on such proportion of upfront charges or by any other amount (called as premium, salami, cost, name) payable in respect price, development charges or by any other of service by way of name) paid for long term lease of land, as is granting of long term attributable to the residential apartments, lease of thirty years, or which remain un- booked on the date of more, on or after issuance of completion certificate, or first 01.04.2019, for occupation of the project, as the case may be, construction of in the following manner - residential apartments by a promoter in a [GST payable on upfront amount (called project, intended for as premium, salami, cost, price, sale to a buyer, wholly development charges or by any other or partly, except where name) payable for long term lease of land the entire consideration for construction of the residential has been received after apartments in the project but for the issuance of completion exemption contained herein] x (carpet certificate, where area of the residential apartments in the required, by the project which remain un- booked on the 2

competent authority or date of issuance of completion certificate after its first occupation, or first occupation ÷ Total carpet area of whichever is earlier. the residential apartments in the project);

The amount of GST exemption available for Provided further that the tax payable in terms construction of of the first proviso shall not exceed 1 per residential apartments in cent. of the value in case of affordable the project under this residential apartments and 5 per cent. of the notification shall be value in case of residential apartments other calculated as under: than affordable residential apartments remaining un- booked on the date of issuance [GST payable on of completion certificate or first occupation. upfront amount (called The liability to pay integrated tax on the said as premium, salami, proportion of upfront amount (called as cost, price, development premium, salami, cost, price, development charges or by any other charges or by any other name) paid for long name) payable for long term lease of land, calculated as above, shall term lease of land for arise on the date of issue of completion construction of the certificate or first occupation of the project, project] x (carpet area of as the case may be. the residential apartments in the project ÷ Total carpet area of the residential and commercial apartments in the project).

(iii) after paragraph 1, the following paragraphs shall be inserted, namely, -

“1A. Value of supply of service by way of transfer of development rights or FSI by a person to the promoter against consideration in the form of residential or commercial apartments shall be deemed to be equal to the value of similar apartments charged by the promoter from the independent buyers nearest to the date on which such development rights or FSI is transferred to the promoter.

1B. Value of portion of residential or commercial apartments remaining un-booked on the date of issuance of completion certificate or first occupation, as the case may be, shall be deemed to be equal to the value of similar apartments charged by the promoter nearest to the date of issuance of completion certificate or first occupation, as the case may be.”

(iv) in paragraph 3 relating to Explanation, after clause (iv), the following clause shall be inserted, namely: - “(v) The term “apartment” shall have the same meaning as assigned to it in clause (e) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).

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(vi) The term “affordable residential apartment” shall have the same meaning as assigned to it in the notification No. 8/2017- Integrated Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, 2017 vide GSR number 683(E) dated 28th June, 2017, as amended.

(vii) The term “promoter” shall have the same meaning as assigned to it in clause (zk) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).

(viii) The term “project” shall mean a Real Estate Project or a Residential Real Estate Project.

(ix) the term “Real Estate Project (REP)” shall have the same meaning as assigned to it in clause (zn) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).

(x) The term “Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP;

(xi) The term “carpet area” shall have the same meaning as assigned to it clause (k) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).

(xii) “an apartment booked on or before the date of issuance of completion certificate or first occupation of the project” shall mean an apartment which meets all the following three conditions, namely-

(a) part of supply of construction of the apartment service has time of supply on or before the said date; and (b) consideration equal to at least one instalment has been credited to the bank account of the registered person on or before the said date; and (c) an allotment letter or sale agreement or any other similar document evidencing booking of the apartment has been issued on or before the said date.

(xiii) “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to the size of the piece of land upon which it is built.”.

2. This notification shall come into force with effect from the 1st day of April, 2019.