CA Venugopal G CA Vinay K V. Basics to Advance & Technology in GST SOUTHERN INDIA REGIONAL COUNCIL. Workshop on Real Estate Sector.

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1 ICAI SOUTHERN INDIA REGIONAL COUNCIL Workshop on Real Estate Sector Topic : GST Basics to Advance & Technology in GST CA Venugopal G CA Vinay K V

2 Registration

3 What is the registration requirement, when the developer has projects, in different parts of the country say one in Tamil Nadu, Karnataka, Telangana and Delhi? Registration What is the registration requirement for registering 'Site Office', located in the state, which is different from the fixed place of business? Registration Whether it is mandatory to obtain registration as 'Input Service Distributor'? Registration

4 Whether registration is required when the goods after the completion of the project is moved to another state? Registration Whether the registration is required, when the goods left over has been sold locally? If No registration is required, what is the nature of tax that needs to be discharged? Registration Registration Is it beneficial to take registration in each of the state, where project is undertaken?

5 Joint Development

6 JD What is the taxability in the hands of the developer, when the developer constructs for landlord? JD What is the taxability in the hands of the landowner, when he provides the land for development? JD What is the taxability in the hands of the landowner, when he sells his portion and what is the applicable rate of GST?

7 JD What is the value to be considered for discharging the tax on the portion provided to the landowner? JD What is the time of supply on the landowner's portion? JD What is the tax rate on land owner share of apartments? How to arrive at construction cost of land owner?

8

9 Whether sale of Land liable to GST? Whether sale of Land with Building liable to GST? M/s. ABC Developers completed construction on 23rd Sept Mr. X Booked the apartment in July 2017, Paid 10% Advance in Aug, 90% in Oct 2017 Mr. Y Booked the Apartment in Aug 2017 and Paid 50% on 30th Sept, Balance not paid. Whether preferential location charges liable to GST and if yes, what is the rate?

10 What is 'First Occupation'? What are the documents required to prove that there has been first occupation? Does Land converted into Plots and sold liable to GST? Whether the electricity, water supplied along with commercial space liable to GST?

11 What is the taxability for 'Ready to Move In' apartments? What is the taxability for Villas / Row Houses? What is the liability under GST, Material moved from one Project Site to other Project Site ( Same State / Other State )?

12 Competent Authority means the Government or any authority authorised to issue completion certificate under any law for the time being in force. In case of non-requirement of such certificate from such authority, from any of the following, namely: (i) (ii) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or a chartered engineer registered with the Institution of Engineers(India); or

13 What are Visible and invisible 'Barter' transactions? Are they Taxable? What is the taxability of 'Transfer of Development Rights Whether Interest or any penal charges received are liable to GST?

14 Project delay charges are paid to the customers by the developers? What is the nature of taxability for legal charges, documentation charges collected by the developer? What is the nature of tax and liability in the hands of the developer, when he withholds certain amount as 'Cancellation Charges'?

15 What is the taxability of 'Mobilization Advance'? What is the taxability in the hands of the contract for 'Liquidated Damages'? Whether monthly maintenance charges collected are liable to GST?

16 Whether 'Stamp Duty' & other statutory levies collected and paid on behalf of the buyer, liable to GST? Whether long term lease say 99 year lease, liable to GST? What is the liability in the hands of the developer, when he markets the commercial space or residential space of the landowner?

17 What is the liability in the hands of the contractor, who undertakes construction of individual house? What is the taxability under GST on the Municipal Taxes collected by the developer? Penalty paid to Customer for delay in delivering the Project.

18 What is the taxability, when generator along with diesel & operator are provided? How are FOC (Free of Cost) supplies treated for Valuation under GST? Onward sale of flats during construction by the customer?

19 Is GST Leviable on 'Society Membership Fees'? What is the position when developer hands over 'Society Membership Fees to Association? Whether One Time Maintenance Fees liable to GST and if yes, whether to be included in the value of apartment?

20 What is the taxability of 'Parking Space' under GST? What is the tax implication on 'Redevelopment of Society? When and how do I account for GST for progressive payment contracts, which involves the issuance of certificate of work done at each stage?

21 What is the taxability, when associate companies or distinct persons use the same logo or trade mark of the company? What is the taxability of 'Salary Recovery' from the employee?

22 Rate of Tax & Exemptions

23 Rate of Tax Sale of Land - NA Sale of Completed Land & Building - NA General Rate of Tax - 18% Deduction for Land if included - 1/3rd (Effective Rate 12%) Special cases Rate of Tax - 12%

24 Notification 20 : 12% Supplied to the Government, a local authority or a Governmental authority Composite supply in relation to historical monument, archaeological site etc canal, dam or other irrigation works pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal Other Cases : construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road, bridge, tunnel etc a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana pollution control or effluent treatment plant, except located as a part of a factory a structure meant for funeral, burial or cremation of deceased

25 Notification 20 : 12% Composite supply of works contract, supplied by way of construction,. a) railways, excluding monorail and metro; b) a single residential unit otherwise than as a part of a residential complex; c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership or d) low cost houses up to a carpet area of 60 PMAY Scheme e) post-harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.

26 Notification 24 : 12% Services provided to the CG/SG or a local authority etc by way of construction. a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or c) a residential complex predominantly meant for a) self-use or b) the use of their employees or c) other persons specified in paragraph 3 of the Schedule III (MP / MLA / etc)

27 Rate What is the rate of tax, when the consideration is with value of land and without value of land? Rate Is there an option in the hands of the developer to opt for discharging tax for consideration with value of land and without value of land? Rate Can developer go for composition rate?

28 Rate What is the rate of tax, when fit outs are provided by the developer (could be in same agreement or independent agreement)? Rate What is the rate of tax for the contractor, who undertakes construction of individual house? Rate Contractor providing Multiple Services, Granite Laying to Lift Supply. Under Single PO, Under multiple PO s

29 Exemptions What are the exemptions available to the Real Estate Sector? Exemptions Are there any exemptions for affordable housing under PMAY scheme? Exemptions Is exemption available for renting of residential or commercial space?

30 Input Tax Credit

31 ITC Can the benefit of tax paid by the contractor be eligible for availment? ITC Is the developer eligible to claim the benefit of ITC on goods and services, to the extent used for Land owner's portion? ITC How do we apportion the ITC already claimed on those units of apartments, sold after the receipt of completion certificate?

32 ITC Whether the benefit of ITC be available on barter transactions? ITC Whether the benefit of ITC would be available in full, when the developer withholds certain amount payable to the contractor (Retention Amount)? ITC Can ITC be availed on Mobilization Advance paid?

33 Returns

34 Returns What is taxable value in the GST Returns? Returns How do we adjust, if there is any cancellation of the booking? Where to report? Returns What would be the liability in the hands of the developer, when the invoice is raised but amount not collected?

35 Returns More Output is shown in another GSTR 3B erroneously, what to be done next? Returns Is submission of details of HSN summary mandatory? Returns Whether late filing fee is applicable for each return?

36 Amount deposited in electronic cash ledger as CGST/SGST instead of IGST. Now the liability is that of IGST. Can we transfer this balance in Electronic cash ledger from CGST/ SGST to IGST? Returns Returns Amount is wrongly deposited as compensation cess instead of in the field of tax. Therefore, assessee is unable to file GSTR 3B. What is the course of action? Returns Whether any changes pertaining to earlier return needs to be updated in subsequent GSTR 3B or in actual GSTR 1?

37 Returns What if the GSTIN of customer is incorrect or if the same is not provided. How to upload the GST returns? Returns GSTR 3B is wrongly filled and the same is submitted for the month of July 2017 but not filed. What is the recourse available? Returns What is the Procedure of claiming refund of GST late fee paid under penalty column?

38 Anti - Profiteering

39 How to compute the benefit for the purpose of anti - profiteering clause? Anti-profiteering What is the process if there has been no benefit but increase in costs? Anti-profiteering Whether the benefit is to be passed on all contracts or only on contracts executed prior to July and continuing after July? Anti-profiteering

40 Technology Related

41 Automated Reporting Tool

42 Proactive Communication Automated Mis match intimation 9th of every month, download 2A and process with purchase register- Send reminder mail to vendor with data missing data 15th of every month, Generate Anticipated Mismatch with Vendors for all the additions made, update the mis-match reports. 17th of every month, download 1A and process with Sales register- Update correction changes to

43 Monthly Compliance Report

44 Status Dashboard Picture communicates a lot Colour codes of compliance Violated, near Violation, fully complied Books data with Filed Data Pending Due for filing vs filed

45 Data Reuse ERP / CRM Integrate with Books { Advances / Invoice / Receipt / Purchase etc } Supplier Sales can be Auto posted as Recipient Purchase Deliver Challan converted to e-way bill Single Window challan Payment Bank API Create Vendor / Customer Master GSTIN Public API

46 Thank You