Page 19 - GSTL_13th August 2020_Vol 39_Part 2

GST AND IMMOVABLE PROPERTY — TO
PAY TAX IN CASH OR CREDIT?
By
B.N. Gururaj, B.A., LL.B.
ADVOCATE

Notification No. 11/2017-C.T. (Rate) prescribes
the rates of GST for various classes of services and also
contains a residuary entry in Sl. No. 35. Here, my interest
is confined to Entry 3 which deals with varieties of con-
struction services and in particular sub-entries (i) to (id).
Sub-entries (i) and (ic) deal with affordable residential apartments Residential
Real Estate Project (RREP for short) and Real Estate Project (REP for short). Sub-
entries (ia) and (id) deal with residential apartments other than affordable resi-
dential apartments in RREP and REP respectively. Sub-entry (ib) deals with
commercial apartments. While sub-entries (i) and (ic) attract 0.75% CGST, sub-
entries (ia), (ib) and (id) attract 3.75% CGST. Such concession of course comes
with several strings. Conditions in column (5) of the notification are common to
all these five entries.
Two of these strings are of relevance here. First condition, which is
styled as a proviso states that Central Tax at the rate specified in column (4), i.e.,
0.75% or 3.75% should be paid in cash, that is, by debit in the electronic cash
ledger. Evidently, this means that entire CGST at the specified rates should be
paid only in cash.
Next proviso states that input credit cannot be taken except to the extent
prescribed in Annexure-I (applicable to REP) and Annexure-II (applicable to
RREP) to the notification.
Clause (ii) of the fourth proviso specifically applies to landowner-
promoter who gets his share of apartments. This clause allows the landowner to
take credit GST charged by the developer towards the supply of construction

GST LAW TIMES  13th August 2020  19