Real Estate: GST Applicability on Ongoing Projects Clarified by AAR
The Maharashtra Authority of Advance Ruling (AAR) has clarified the GST applicability on ongoing real estate projects, specifically for Raymond Limited's Ten X Habitat. The ruling affects the tax rate for certain towers within the project.
Real EstateGstAarRaymond LimitedTen X HabitatReal EstateJun 23, 2025
All the apartments in the project are compact, measuring less than 60 square meters, and are classified as low-cost. These apartments are being sold for more than Rs 45 lakhs. The sales occur before the issuance of the completion certificate by the competent authority or before the first occupation, whichever comes first.
Questions Raised by the Applicant
The applicant approached the Authority of Advance Ruling (AAR) with a specific query. The question was: “Whether the Applicant has the option to pay tax at the rate of 12 per cent (6 per cent CGST + 6 per cent MGST) with Input Tax Credit (ITC) for the supply of residential apartments in all its ten Aspirational towers, in accordance with item (ie) of Sl. No. of the Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017?”
Advance Ruling by Maharashtra AAR
The Maharashtra Authority of Advance Ruling (AAR) provided a detailed response to the applicant's query. According to the AAR, the applicant cannot apply the 12% GST rate to all 10 towers. Only Towers A, B, and C meet the criteria for an ongoing project as defined by the GST Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, as amended from time to time. Therefore, the specified rate in the notification applies only to Towers A, B, and C, and that too, subject to the fulfillment of all other conditions mentioned in the notification.
This ruling has significant implications for developers and buyers in the real estate sector, as it clarifies the tax obligations for ongoing projects. It ensures that the tax structure is fair and transparent, promoting compliance and trust in the real estate market.
Background Information
Raymond Limited- Realty Division is a well-known real estate developer with a strong track record of delivering high-quality projects. The company is committed to providing affordable and well-equipped residential options to a diverse range of buyers. The Ten X Habitat project is a testament to their commitment to excellence and innovation in the real estate industry.
Conclusion
The AAR's ruling on the GST applicability for the Ten X Habitat project provides clarity and guidance for developers and buyers. It highlights the importance of adhering to the specific criteria outlined in the GST notifications and ensures that the tax system is applied consistently and fairly. This ruling is expected to have a positive impact on the real estate sector, fostering a more transparent and regulated market environment.
Frequently Asked Questions
What is the Aspirational Project?
The Aspirational Project is a real estate development by Raymond Limited- Realty Division, spanning 14 acres with 10 buildings, each having 42 floors. It includes residential apartments, commercial units, and common facilities like a clubhouse and swimming pool.
What is the main question raised by Raymond Limited- Realty Division?
The main question raised was whether they could pay tax at the rate of 12% (6% CGST + 6% MGST) with Input Tax Credit for the supply of residential apartments in all ten towers of the Aspirational Project.
What was the AAR's ruling on the GST applicability?
The AAR ruled that Raymond Limited can only apply the 12% GST rate to Towers A, B, and C, as these meet the criteria for ongoing projects as defined by the GST Notification No. 11/2017.
What are the implications of the AAR's ruling?
The ruling ensures that the tax structure is fair and transparent, promoting compliance and trust in the real estate market. It clarifies the tax obligations for ongoing projects and provides guidance for developers and buyers.
What is the significance of the Ten X Habitat project?
The Ten X Habitat project is significant as it provides affordable and well-equipped residential options. It is a testament to Raymond Limited- Realty Division's commitment to excellence and innovation in the real estate industry.
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