This book discusses the complexities of taxability concerning works contracts and real estate transactions under the GST regime. Spread over twenty detailed chapters, the book provides an exhaustive analysis starting from:
- Transactions relating to real estate covering the GST implications on the sale of developed plots
- Services by housing societies
- Intricacies of real estate services for both residential and commercial apartments
It addresses specific scenarios for various types of real estate projects, such as:
- Reverse Charge Mechanisms
- Input Tax Credit Provision
- Valuation Methodologies
Each topic is systematically broken down in the following manner:
- Detailed Sections on Background Information
- Definitions
- GST Rates Effective from April 2019
- Special Cases, such as exemptions and concessions for services related to government projects
This book is intended for tax professionals, legal experts, and business owners in the construction and real estate sectors. It offers an understanding of managing GST compliance and maximizing fiscal efficiencies through strategic GST planning.
The Present Publication is the 9th Edition, 2024 and has been amended upto 25th March 2024. This book is authored by V.S. Datey and covers the following:
- Basics of GST
- Background and Key Concepts
- Introduction to the Goods and Services Tax (GST), including its background, broad definitions, and rates
- Details on the GST Compensation Cess, the concept of 'deemed sale', and the taxation powers of district councils
- Explanation of the Goods and Services Tax Network (GSTN) and frameworks for inter-state transactions like IGST and UTGST
- Descriptions of the Central GST Act (CGST) and State GST Act (SGST)
- Taxable Event in GST
- Definition and understanding of what constitutes a taxable event under GST
- Discussion on what qualifies as 'supply' under the GST law, including scenarios where no consideration is involved
- Differentiations between goods and services in various business contexts and exemptions
- Explanation of tax liabilities in cases of mixed and composite supplies
- Classification of Goods and Services
- Overview of the need for classification and the use of the Harmonized System of Nomenclature (HSN)
- Discussion on classification conflicts and general interpretative rules (GIR) in tariff classification
- Valuation of Taxable Supply
- Methods to determine the transaction value for goods and services, including considerations of subsidies, discounts, and related-person transactions
- Details on various valuation methods, including cost-based and margin schemes
- Input Tax Credit (ITC)
- Explanation of the core provisions of ITC and the conditions under which it can be availed
- Specific guidelines on blocked credits and circumstances where ITC cannot be claimed
- ITC in Mixed Supply Contexts
- Details on apportioning ITC when used for both business and non-business purposes
- Special provisions for banks and financial institutions regarding ITC
- ITC - Other Issues
- Various considerations around ITC for capital goods and changes in business structure like mergers or sales
- Input Service Distributor (ISD)
- Functions of an Input Service Distributor and procedures for the distribution of credit
- Requirements for ISD tax invoices and monthly returns
- Place of Supply Rules
- Importance and determination of the place of supply for goods and services affecting GST liabilities
- Specific rules for different types of services, including immovable property-related services, event-based services, and transport services
- Time of Supply
- Rules determining the time of supply, which dictates when GST becomes payable
- Various scenarios and their implications on the timing of GST liability
- Reverse Charge Mechanism
- Explanation of the reverse charge mechanism where the recipient is liable to pay GST
- Details on specific cases and procedural aspects under the reverse charge
- GST Procedures
- Comprehensive details on GST administration, registration requirements, and compliance procedures
- Information on tax payments, electronic ledgers, and returns, including specific forms and their relevance
- E-way Bill for Transport of Goods
- Background and procedures for the generation of e-way bills required for the transportation of goods
- Regulatory provisions and penalties associated with e-way bills
- Miscellaneous Issues in GST
- Discussion on anti-profiteering measures, tax deduction at source (GST TDS), and advance ruling mechanisms
- Taxability of Works Contracts and Real Estate Transactions
- Coverage of GST on various real estate-related transactions
- Specifics on the taxability of sales of developed plots and the inclusion of development costs
- Discussion on the act of refraining from or tolerating certain acts under GST
- Examination of services provided by housing societies or resident welfare associations
- Real Estate Services for Residential and Commercial Apartments
- Background and definitions relevant to real estate services
- A detailed explanation of GST rates effective from April 1, 2019, for different types of real estate projects
- Insights on the valuation for GST purposes when land value is included in the total amount charged
- Overview of reverse charge mechanisms for input and services and provisions for ongoing projects regarding input tax credits
- Detailed discussion on the apportionment of input tax credit and contracts for constructing affordable residential apartments
- Valuation issues and the impact of joint development agreements on real estate services
- TDR/FSI and Long-Term Lease Real Estate Transactions
- Tax implications on real estate transactions excluding the sale of land or completed buildings
- Transfer of development rights and implications for GST
- Specific conditions and exemptions related to transferable development rights (TDR), Floor Space Index (FSI), and upfront amounts for long-term leases
- Valuation challenges and summary of liabilities in transactions involving TDRs or FSIs
- Leasing and Renting of Real Estate
- Clarification that leasing or renting of land and buildings constitutes a 'supply of services'
- Specifics on renting immovable property and services supplied jointly by co-owners
- Exemptions and reverse charge scenarios in the context of services supplied by governmental bodies in relation to renting of immovable property
- Construction and Works Contract Services
- Taxation details on construction activities and works contract services
- Rate of tax for works contract as a composite supply and distinctions between construction services and works contract services
- Information on exemptions, concessions, and the tax implications for subcontractors in the context of services supplied to or by the government
- Government Related Activities
- Overview of public administration services and services provided by the government that are exempt from GST
- Details on concessional rates and reverse charge mechanisms for services provided by or to governmental entities, excluding specific departments like railways and post
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