Nandhakumar & Sundaran
Chartered Accountants

By: Nandhakumar & Sundaran | December 10, 2018

CBIC has issued a Press Release to clarify certain issues relating to Applicable Output GST Rates, Input Tax Credit (ITC) and Effective Tax Rate on Construction of Property, like complex, building, flat, etc. under affordable housing or other segments, along with comparative tax rates applicable during  pre-GST period.

Further, Govt. has reiterated that GST is not applicable on sale of ready to move-in flats where completion certificate has already been issued by the competent authority, i.e. GST is applicable only on sale of under-construction property or ready to move-in flats but where completion certificate is yet to be issued at the point of time of sale.

CBIC Press Release dt. 8 Dec. 2018

1. It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/ building and ready to move-in flats where sale takes place after issue of completion certificate by the competent authority. GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale.

2. Effective rate of tax and credit available to the builders for payment of tax are summarized in the table for pre-GST and GST regime.

PeriodOutput Tax RateInput Tax Credit detailsEffective Rate of Tax
Pre-GSTService Tax: 4.5%; VAT: 1% to 5%(composition scheme)Central Excise on most of the construction materials: 12.5%; VAT: 12.5 to 14.5%; Entry Tax: YesNo input tax credit (ITC) of VAT and Central Excise duty paid on inputs was available to the builder for payment of output tax, hence it got embedded in the value of properties. Considering that goods constitute approximately 45% of the value, embedded ITC was approximately 10- 12%.Effective pre-GST tax incidence: 15- 18%
GSTAffordable housing segment: 8%; Other segment: 12% after 1/3rd abatement of value of landMajor construction materials, capital goods and input services used for construction of flats, houses, etc. attract GST of 18% or more.ITC available and weighted average of ITC incidence is approximately 8 to 10%.Effective GST incidence, for affordable segment and for other segment has not increased as compared to pre-GST regime.

3. Housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of State Government etc., attract GST of 8%. For such projects, after offsetting input tax credit, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.

4. For projects other than affordable segment, it is expected that the cost of the complex/ buildings/ flats would not have gone up due to implementation of GST. Builders are also required to pass on the benefits of lower tax burden to the buyers of property by way of reduced prices/ installments, where effective tax rate has been down.

Category: News 


By: Nandhakumar & Sundaran | December 08, 2018

CBIC has extended the deadline/ due date upto 31 March 2019 for filing of GST Annual Return in Form GSTR-9 (normal dealers)/ GSTR-9A (composition dealers) and GST Audit Report in Form GSTR-9C  (Audit Certificate/ Reconciliation Statement in the case of Taxpayers having turnover above Rs. 2 crores).

CBIC Press Release dt. 7 Dec. 2018

Extension of due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C 

1. FORM GSTR-9 and FORM GSTR-9A have been notified vide notification No. 39/2018-Central Tax, dated 04.09.2018 while FORM GSTR-9C has been notified vide notification no. 49/2018-Central Tax, dated 13.09.2018 as part of the CGST Rules.

2. The competent authority has decided to extend the due date for filing FORM GSTR-9, FORM GSTR-9...

Category: GST 

Tags: News 

By: Nandhakumar & Sundaran | December 08, 2018

Based on representations from stakeholders, the SEBI has extended the deadline upto 1 April 2019, for compliance with the new requirements for transfer of listed securities in dematerialised form with effect from 5 Dec. 2018, i.e. now restriction on transfer of listed shares, debentures, etc. securities held in physical form shall be applicable from 1 April, 2019.

SEBI Press Release PR No. 49/2018 dt. 3 Dec. 2018

The Board, on March 28, 2018, decided that except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository. This measure was to come into effect from December 5, 2018.

Subsequently, SEBI has r...

Category: SEBI 

Tags: News 

By: Nandhakumar & Sundaran | December 08, 2018

CBIC has notified the Revised All Industry Duty Drawback Rates Schedule for 2018-19 applicable w.e.f. 19 Dec. 2018, vide Notification No. 95/2018 Customs (NT) dt. 6 Dec. 2018, in respect of specified exports and subject to compliance with the procedural requirements notified from time to time, as under:

Revised All Industry Duty Drawback Rates Schedule applicable w.e.f. 19 Dec. 2018: CBIC Notification NO. 95/2018 Customs (NT) dt. 6 Dec. 2018

G.S.R. (E). – In exercise of the powers conferred by sub-section (2) of section 75 of the Customs Act, 1962 (52 of 1962) and sub-section (2) of section 37 of the Central Excise Act, 1944 (1 of 1944), read with rules 3 and 4 of the Customs and Central Excise Duties Drawback Rules, 2017 (hereinafter referre...

Category: DGFT 

Tags: Updates 

By: Nandhakumar & Sundaran | December 08, 2018

CBDT has clarified/ reiterated that in the case of senior citizens, no tax (TDS) is required to be ‘deducted at source’ under Section 194A, where the amount of such income (credited or paid) during the financial year does not exceed Rs. 50,000/- (Rupees fifty thousand) in aggregate.

CBDT (Systems) Notification No. 06/2018 Income Tax dt. 6 Dec. 2018

1. It has been brought to the notice of CBDT that in case of Senior Citizens, some TDS deductors/ Banks are making TDS deductions even when the amount of income does not exceed fifty thousand rupees. The same is not in accordance with the law as the Income-tax Act provides that no tax deduction at source under section 194A shall be made in the case of Senior Citizens where the amount of such income...

Category: Income Tax 

Tags: Updates