The 43rd GST Council Meeting was held on 28th May, 2021 wherein various decisions were made. Amongst said decisions, one of the decision was to make appropriate changes in the relevant notification for an explicit provision to make appropriate changes in the relevant notification for an explicit provision to make it clear that land owner promoters could utilize credit of GST charged to them by developer promoters in respect of such apartments that are subsequently sold by the land promotor and on which GST is paid.
In light of the above GST Council decision, Notification No. 02/2021- Central Tax (Rate) dated 2nd June 2021 has been issued whereby Notification No. 11/2017- Central Tax (Rate) dated 28th June 2017 has been amended.
It may be noted that Notification No. 11/2017- Central Tax (Rate) dated 28th June 2017 mandates the CGST rates applicable on various taxable services. Vide Notification No. 02/2021- Central Tax (Rate) dated 2nd June 2021 following changes have been made in Notification dated 28th June 2021.
(a) in serial number 3, against items (i), (ia), (ib), (ic) and (id) in column (3) of the Notification No. 11/2017- Central Tax (Rate) dated 28th June 2017 , in the conditions in column (5), in the fourth proviso, in the Explanation, after clause (ii), the following clause shall be inserted, namely-
“(iii) the landowner-promoter shall be eligible to utilise the credit of tax charged to him by the developer-promoter for payment of tax on apartments supplied by the landowner-promoter in such project”
It may be noted here that above amendment shall come into force with effect from 2nd June 2021.
With the above amendment it has now been made clear that land owner promoters could utilize credit of GST charged to them by developer promoters in respect of such apartments that are subsequently sold by the land promotor and on which GST is paid.
It may be noted that similar Notifications have also been issued under IGST Act and UTGST Act.
Also Read: GST: Time of Supply of development rights, FSI etc : Notification amended
For reading / downloading the Amendment Notification click at: : https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-02-2021-2020-cgst-rate.pdf
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
