Same GST Rate Must Apply to All Buyers in Project | AAR

Case Details: Godrej Residency (P.) Ltd., In re - [2025] 174 taxmann.com 1169 (AAR-MAHARASHTRA)

Judiciary and Counsel Details

• D.P. Gojamgunde & Ms Priya Jadhav, Member

Facts of the Case

The Applicant took over an under-construction residential project from an erstwhile promoter who had commenced development of the project comprising two residential buildings. The erstwhile promoter had exercised the one-time option under Notification No. 3/2019-Central Tax (Rate), dated 29-03-2019, opting to pay GST at the standard rate with input tax credit in accordance with Sl. No. 3(if) of Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017, read with the mechanism for 1/3rd deduction towards land value. The jurisdictional officer under CGST contended that the Applicant was bound by the option exercised by the erstwhile promoter and must pay GST at the effective rate of 12% (post land abatement) with input tax credit on all consideration received for residential premises, whether sold by the erstwhile promoter or by the Applicant to new buyers. The Applicant submitted that separate GST rates should apply—12% for balance consideration from earlier allottees and 5% (without ITC) for new buyers. The matter was accordingly placed before the Authority for Advance Ruling (AAR), Maharashtra.

AAR Held

The Authority for Advance Ruling (AAR), Maharashtra held that the one-time option exercised under Notification No. 3/2019-Central Tax (Rate), dated 29-03-2019 was qua-project and continued to bind the Applicant. It ruled that the Applicant could not adopt two different rates of tax for the same project—12% for existing buyers and 5% for new buyers—and was mandatorily required to discharge GST at the effective rate of 12% with input tax credit for consideration received from both categories of buyers. The AAR clarified that the project-wise option once exercised under the notification attaches to the entire project regardless of change in promoter, and that the Applicant’s non-availment of unutilized input tax credit from the erstwhile promoter does not affect this liability.

List of Cases Referred to

• Victoria Realtors, In re [2021] 129 taxmann.com 188/87 GST 172/ 53 GSTL 314 (AAR-KERALA) (para 2.5.1).