Option of 18% GST with ITC or 7.5% GST without ITC exercised in respect of ongoing residential project is applicable for all units in entire project: AAR

Case details: Authority for Advance Rulings, Kerala Victoria Realtors, In re - [2021] 129 taxmann.com 188 (AAR - KERALA)

Judiciary and Counsel Details

• • Sivaprasad S. and Senil A.K. Rajan, Member
  • M.P. Tony, Chartered Accountant for the Appellant.

Facts of the Case

The applicant was engaged in business of construction of gated community villa project. One such project was ‘Vrindhavan’ in which there were 20 units out of which, 9 units were already booked. It opted for old GST rate of 18 per cent as per SI. No. 3 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 for 9 units only. It filed an application for advance ruling to determine whether new tax rate of 7.5 per cent would be applicable to 11 unbooked units.

AAR Held

The Authority for Advance Ruling observed that the option envisaged under Item (if) of SI. No. 3 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 is in respect of entire ongoing project and not in respect of part of project. The option exercised by applicant in respect of ongoing project ‘Vrindhavan’ would be applicable for entire 20 villas comprised in project and therefore, the old rate of tax at 18% with input tax credit would be applicable for all apartments/villas comprised in project.