FAQ’s (Part II) for Real Estate Sector released by CBIC

CBIC has released Frequently Asked Questions (FAQs) (Part II) on real estate dated May 14, 2019, regarding the new GST rate structure notified for real estate sector effective from April 01, 2019. Earlier, FAQs containing 41 questions was issued on May 7, 2019. 

Following are some points which are covered under the FAQs (Part II):

1. In case of an area sharing arrangement between a Landowner-Promoter and a Developer-Promoter, where the Project qualifies to be considered an “Ongoing Project”, whether an option of 1% or 5% (without ITC) vis-à-vis 8% or 12% (with ITC) as prescribed in Notification No. 3/2019 can be exercised by the DeveloperPromoter and LandownerPromoter independently?

The legal and operational harmony necessitates that both the Landowner-Promoter and the Developer-Promoter exercise identical option for a project.

2. Residential Real Estate Project (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15% of the total carpet area of all the apartments in the REP (Clause xix). “Carpet area” shall have the same meaning as assigned to it in clause (k) of Section 2 of the RERA, 2016. Whether non-saleable areas such as society office, club-house, etc., are to be taken into consideration for determining 15% for deciding whether the project is RREP or not?

The term “Residential Real Estate Project (RREP) has been defined in the notification to mean a REP in which the carpet area of the commercial apartments is not more than 15 percent. of the total carpet area of all the apartments in the REP. Apartments shall be taken as commercial or residential apartments as declared to RERA authority.

Complete FAQs (Part II) can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/05/FAQII-Real-estate-sector-1405.pdf

Complete FAQs (Part I) can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/05/FAQ-Real-estate-sector-0705.pdf

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