Notification No. 06/2019 – Integrated Tax (Rate) Explained

Important Keyword: Notification No. 06/2019 IGST, GST on development rights, FSI GST, real estate GST RCM, IGST real estate notification, GST on land lease, promoter GST liability,

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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. 06/2019 - Integrated Tax (Rate): Seeks to notify certain class of persons by exercising powers conferred under section 148 of CGST Act, 2017.

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

G.S.R (E).- In exercise of the powers conferred by section 20 of the IGST Act, 2017 (13 of 2017) read with section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the following classes of registered persons, namely:-

• a promoter who receives development rights or Floor Space Index (FSI) (including additional FSI) on or after 1^st April, 2019 for construction of a project against consideration payable or paid by him, wholly or partly, in the form of construction service of commercial or residential apartments in the project or in any other form including in cash;
• a promoter, who receives long term lease of land on or after 1^st April, 2019 for construction of residential apartments in a project against consideration payable or paid by him, in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name), as the registered persons in whose case the liability to pay integrated tax on, -
• the consideration paid by him in the form of construction service of commercial or residential apartments in the project, for supply of development rights or FSI (including additional FSI);
• the monetary consideration paid by him, for supply of development rights or FSI (including additional FSI) relatable to construction of residential apartments in project;
• the upfront amount (called as premium, salami, cost, price, development charges or by any other name) paid by him for long term lease of land relatable to construction of residential apartments in the project; and
• the supply of construction service by him against consideration in the form of development rights or FSI(including additional FSI), - shall arise on the date of issuance of completion certificate for the project, where required, by the competent authority or on its first occupation, whichever is earlier.
• Explanation:- For the purpose of this notification,-
• The term “apartment” shall have the same meaning as assigned to it in clause (e) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);

• the term “promoter” shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);

• 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.
• the term “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.
• Tax on services covered by sub-para (i) and (ii) of paragraph 1 above is required to be paid under reverse charge basis in accordance with notification No. 10/2017- Integrated Tax (Rate), dated the 28^th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide GSR No. 685 (E), dated the 28^th June, 2017, as amended.

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

(Pramod Kumar)
Deputy Secretary to the
Government of India

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📚 Frequently Asked Questions (FAQs): Notification No. 06/2019 - Integrated Tax (Rate)

🚀 Conclusion & CTA

Notification No. 06/2019 – Integrated Tax (Rate) is a game-changer for the real estate sector, especially promoters working under JDAs or land lease models.

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Download PDF: Notification No. 06/2019 - Integrated Tax (Rate)

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

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