Gst applicability on affordable housing project under ppp

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MOHAN AGRAWAL (Querist)

12 July 2017 What is the GST applicability for a developer in case of affordable housing projects being undertaken through PPP mode. Whether developer will be liable for GST as he has to construct the houses and transfer it back free of cost to the local authority.In lieu of this, developer will get a piece of land on freehold basis.

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 July 2017 66. Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the Beneficiary-led individual house construction / enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY) is exempted.

MOHAN AGRAWAL

MOHAN AGRAWAL (Querist)

12 July 2017 Thanks Seetharaman Sir.
It means that project undertaken under PPP mode will attract GST for developer as he is required to design, finance,develop and transfer back the assets.

Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 July 2017 GST not applicable on transfer after completion. GST applicable on material used by developer.

MOHAN AGRAWAL

MOHAN AGRAWAL (Querist)

13 July 2017 Sir,
Plz let me explain the project model. There is a local authority who wants to develop a slum area of 10 acres. For this he has selected a developer who will construct Economical Weaker Section (EWS) units for slum dwellers on the 6.5 acres out of total land area of 10 acres. The developer is required to design, finance, develop these EWS units and transfer it free of cost to the local authority. In lieu of this, developer will get balance 3.5 acres of land on freehold basis.
Now question is that for the EWS unit construction, whether developer is required to get registered under GST. Whether he will be liable to charge GST on transfer of EWS units and if yes then what will be taxable value?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2017 GST not applicable on transfer of unit after completion. Developer is not required to get registered under GST.

MOHAN AGRAWAL

MOHAN AGRAWAL (Querist)

13 July 2017 Thanks a lot sir.
its clear to me now.
Please further clarify that if developer get registered under GST then can he claim input tax credit for other projects where GST will be applicable. (In my case when he will start construction on land which he will get from local authority.)

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2017 Yes if developer get registered under GST then he can claim input tax credit for other projects where GST will be applicable.

MOHAN AGRAWAL

MOHAN AGRAWAL (Querist)

13 July 2017 whether he can claim input tax credit accrued during construction of EWS units(where GST will not be applicable as it will be transferred after complrtion) for the other projects.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2017 He can't claim input tax credit accrued during construction of EWS units where GST will not be applicable

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