Real Estate

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As regards builders / promoters, there is a mixed reaction in the real estate industry with the RERA Act coming into full force. The development has brought the builders / promoters into action for making requisite financial arrangements to comply with the provisions of the Act. The builders / promoters are now restructuring their real estate projects to meet the requirements of the Act more effectively and proposing to treat each building as a different phase for the registration process.


The Summary of New Rates (CGST + SGST) applicable for such construction services in case of New Projects (commencing on or after 1st April, 2019 ) & Ongoing Projects in respect of which the promoter has not exercised the option of paying taxes at the old rates is as under :

Sr. No.Nature of Construction Service               Rate of Tax 1/3rd Deduction for LandEffective Rate of Tax ITC Available
1‘Affordable Residential Apartment’ in REP/RREP (area 60 sqm in metros / 90 sqm in non-metros and value up to Rs. 45 lakhs)1.5%0.5%1%

No

 

2Ongoing Specified Low Cost – Affordable Housing Projects under the existing Central/State Govt. Housing Schemes1.5%0.5%1%No
3Residential Apartments Other than ‘Affordable Residential Apartment’ in REP/RREP 7.5%2.5%5%No
4Commercial Apartments (in an RREP)  7.5%2.5%5%No
5Commercial Apartments (in a Residential Project other than in an RREP)  18%6%12%Yes – Proportionate ITC
6Commercial Apartments in a Commercial Project18%6%12%Yes


Summary of New Rates (CGST + SGST) applicable for such construction services in case of New Projects (commencing on or after 1st April 2019 ) & Ongoing Projects in respect of which the promoter has not exercised the option of paying taxes at the old rates :

Item. No.Nature of Construction Service               Rate of Tax 1/3rd Deduction for LandEffective Rate of Tax ITC Available
i‘Affordable Residential Apartment’ in RREP     0.75%    + 0.75% = 1.50%0.5%1%No
iaResidential Apartments Other than ‘Affordable Residential Apartment’ in RREP     3.75%    + 3.75% = 7.50%2.5%5%No
ibCommercial Apartments (in an RREP)      3.75%    + 3.75% = 7.50%2.5%5%No
ic‘Affordable Residential Apartment’ in REP (other than RREP)    0.75%    + 0.75% = 1.50%0.5%1%No
idResidential Apartments Other than ‘Affordable Residential Apartment’ in REP (other than RREP)    3.75%    + 3.75% = 7.50%2.5%5%No


We have been advising the companies in Real Estate with the Accounting, GST Advisory, GST legal periodic compliances, GST Audit, even in fundraising, etc. for more than 15 years.
 

APMH specializes also in fundraising advisory and the Insolvency and Bankruptcy IBC code advisory for the real estate sector.

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