Notification No. 05/2019 – Central Tax (Rate) Explained

Important Keyword: GST Notification 05/2019, development rights GST India, FSI GST RCM, land lease GST real estate, Section 9(3) CGST,

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[F. No. 354/32/2019- TRU]
Government of India
Ministry of Finance
(Department of Revenue)

New Delhi, the 29^th March, 2019

Notification No. 05/2019 - Central Tax (Rate): Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services to be taxed under Reverse Charge Mechanism (RCM) as recommended by Goods and Services Tax Council for real estate sector.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GSR......(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.13/2017- Central Tax (Rate), dated the 28^thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28^thJune, 2017, namely:-

In the said notification, -

• in the Table, after serial number 5A and the entries relating thereto, the following serial number and entries shall be inserted, namely: -

(1)	(2)	(3)	(4)
“5B	Services supplied by any person by way of transfer of development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project by a promoter.	Any person	Promoter.
5C	Long term lease of land (30 years or more) by any person                                  against consideration in the form of upfront amount (called as premium, salami, cost, price,                      development charges or by any other name) and/or periodic rent for construction of a project by a promoter.	Any person	Promoter.”;

• in the Explanation, after clause (h), the following clauses shall be inserted, namely: -
  “(i) The term “apartment” shall have the same meaning as assigned to it in clause (e) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).
• the term “promoter” shall have the same meaning as assigned to it in clause (zk) under section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2017).
  • the term “project” shall mean a Real Estate Project (REP) or a Residential Real Estate Project (RREP);
  • “the term “Real Estate Project (REP)” shall have the same meaning as assigned to it in in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016).
  • The term “Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP.
  • “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to the size of the piece of land upon which it is built.”.

2. This notification shall come into force with effect from the 1^st of April, 2019.

(Pramod Kumar)
Deputy Secretary to the
Government of India

Note: -The principal notification No. 13/2017 - Central Tax (Rate), dated the 28^th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 692 (E), dated the 28^th June, 2017 and was last amended by notification No.29/ 2018- Central Tax (Rate), dated the 31^st December, 2018 vide number G.S.R. 1273 (E), dated the 31^st December, 2018.

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📚 Frequently Asked Questions (FAQs): Notification No. 05/2019 - Central Tax (Rate)

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Conclusion✅:

Notification No. 05/2019 – Central Tax (Rate) clearly shifts GST liability to promoters under RCM for TDR/FSI and long-term land lease transactions in real estate.

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Download PDF: Notification No. 05/2019 - Central Tax (Rate)

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More Information: https://taxinformation.cbic.gov.in/

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