In rule 42 of the said rules,
(1) in sub rule (1),-
(a) in clause (f), the following Explanation shall be inserted, namely:
“Explanation: For the purpose of this clause, it is hereby clarified that in case of supply of services covered by clause (b) of T4 shall be zero during the construction phase because inputs and input services will be commonly used for construction of apartments booked on or before the date of issuance of completion certificate or earlier, and those which are not booked by the said date.”
(b) in clause (g), after the letter and figure “ “and at summary level in FORM GSTR
(c) in clause (h),-
(i) for the brackets and letter “(g)”, the brackets and letter “(f)” shall be substituted;
(d) in clause (i),-
(i) before the proviso, the following proviso shall be inserted, namely:
ª∞ «Ò∏Â√¿Ê C¢üPÀÈvÀªÁV ¥ÀæPÀn¸À¯ÁzÀÄzÀÄ «±ÉõÀ gÁdå ¥ÀwæPÉ Ȩ́ÆêÀĪÁgÀ, K¦æ¯ï 15, 2019 (ZÉÊvÀæ 25, ±ÀPÀ ªÀµÀð 19 day, April 15, 2019 (Chitra 25, Shaka Varsha 1940) FINANCE SECRETARIAT NOTIFICATION (4-B/2019) No. FD 47 CSL 2017, Bengaluru, dated: 15.04.2019 conferred by section 164 of the Karnataka Goods 2017), on the recommendation of the GST Council, following rules further to amend the Karnataka commencement.- (1) These rules may be called the Rules, 2019.
deemed to have come into force with effect deemed to have come into force with effec Amendment of rule 41.- In the Karnataka Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), in rule 41, in sub-rule (1), after the proviso, the following explanation shall be inserted, namely:- For the purpose of this sub-rule, it is hereby clarified that the “value of assets” means the value of the entire assets of the business, whether or not input tax credit has been In rule 42 of the said rules,- in clause (f), the following Explanation shall be inserted, namely:
For the purpose of this clause, it is hereby clarified that in case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the said Act, value of shall be zero during the construction phase because inputs and input services will be commonly used for construction of apartments booked on or before the date of issuance of completion certificate or first occupation of the project, whichever is earlier, and those which are not booked by the said date.” in clause (g), after the letter and figure “FORM GSTR-2”, the words, letters and figure and at summary level in FORM GSTR-3B” shall be inserted;
for the brackets and letter “(g)”, the brackets and letter “(f)” shall be before the proviso, the following proviso shall be inserted, namely:
«Ò∏Â√¿Ê , ±ÀPÀ ªÀµÀð 1940) , Shaka Varsha 1940) £ÀA. 315 No. 315 .2019 Goods and Services Tax Council, the Government Karnataka Goods and Services Karnataka Goods and from 29.03.2019 and effect from the 1st day of In the Karnataka Goods and Services Tax Rules, 2017 rule (1), after the proviso, the following rule, it is hereby clarified that the “value of assets” means the value of the entire assets of the business, whether or not input tax credit has been in clause (f), the following Explanation shall be inserted, namely:- For the purpose of this clause, it is hereby clarified that in case of supply paragraph 5 of Schedule II of the said Act, value of shall be zero during the construction phase because inputs and input services will be commonly used for construction of apartments booked on or before the date of first occupation of the project, whichever is ”, the words, letters and figure for the brackets and letter “(g)”, the brackets and letter “(f)” shall be before the proviso, the following proviso shall be inserted, namely:- 2 “Provided that in case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the Act, the value of ‘E/F’ for a tax period shall be calculated for each project separately, taking value of E and F as under:- E= aggregate carpet area of the apartments, construction of which is exempt from tax plus aggregate carpet area of the apartments, construction of which is not exempt from tax, but are identified by the promoter to be sold after issue of completion certificate or first occupation, whichever is earlier;
F= aggregate carpet area of the apartments in the project;
Explanation 1: In the tax period in which the issuance of completion certificate or first occupation of the project takes place, value of E shall also include aggregate carpet area of the apartments, which have not been booked till the date of issuance of completion certificate or first occupation of the project, whichever is earlier;
Explanation 2: Carpet area of apartments, tax on construction of which is paid or payable at the rates specified for items (i), (ia), (ib), (ic) or (id), against serial number 3 of the Table in the Notification (11/2017) No. FD 48 CSL 2017 dated the 29th June, 2017, published in Karnataka Gazette, Extraordinary, Part –IVA, No. 601, dated the 29th June, 2017, as amended, shall be taken into account for calculation of value of ‘E’ in view of Explanation (iv) in paragraph 4 of the Notification (11/2017) No. FD 48 CSL 2017 dated the 29th June, 2017, published in Karnataka Gazette, Extraordinary, Part –IVA, No. 601, dated the 29th June, 2017, as amended.
(ii) in the proviso, for the word “Provided”, the words “Provided further” shall be substituted;
(e) for clause (l), the following clause shall be substituted, namely:- “(l) the amount ‘C3‘, ‘D1’ and ‘D2’ shall be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax and declared in FORM GSTR-3B or through FORM DRC-03;”;
(f) in the clause (m), for the words “added to the output tax liability of the registered person”, the words, letters and figures “reversed by the registered person in FORM GSTR-3B or through FORM DRC-03” shall be substituted;
(2) in sub rule (2), for the words “The input tax credit”, the words, brackets figures and letter “Except in case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the Act, the input tax credit” shall be substituted;
(3) in clause (a) of sub-rule (2), for the words “added to the output tax liability of the registered person”, the words, letters and figures “reversed by the registered person in FORM GSTR-3B or through FORM DRC-03” shall be substituted;
(4) after sub rule (2), the following shall be inserted, namely:- “(3) In case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the Act, the input tax determined under sub-rule (1) shall be calculated finally, for each ongoing project or project which commences on or after 1st April, 2019, which did not undergo or did not require transition of input tax credit consequent to change of rates of tax on 1st April, 2019 in accordance with Notification (11/2017) No. FD 48 CSL 2017 dated the 29th June, 2017, published in Karnataka Gazette, Extraordinary, Part –IVA, No. 601, dated the 29th June, 2017, as amended for the entire period from the commencement of the project or 1stJuly, 2017, whichever is later, to the completion or first occupation of the project, whichever is earlier, before the due date for furnishing of the return for the month of September following the end of financial year in which the completion certificate is issued or first occupation takes place of the project, in the manner prescribed in the said sub-rule, with the modification that value of E/F shall be calculated taking value of E and F as under:
E= aggregate carpet area of the apartments, construction of which is exempt from tax plus aggregate carpet area of the apartments, construction of which is not exempt from tax, but 3 which have not been booked till the date of issuance of completion certificate or first occupation of the project, whichever is earlier:
F= aggregate carpet area of the apartments in the project;
and,-
(a) where the aggregate of the amounts calculated finally in respect of ‘D1’ and ‘D2’ exceeds the aggregate of the amounts determined under sub-rule (1) in respect of ‘D1’ and ‘D2’, such excess shall be reversed by the registered person in FORM GSTR-3B or through FORM DRC-03 in the month not later than the month of September following the end of the financial year in which the completion certificate is issued or first occupation of the project takes place and the said person shall be liable to pay interest on the said excess amount at the rate specified in sub-section (1) of section 50 for the period starting from the first day of April of the succeeding financial year till the date of payment; or
(b) where the aggregate of the amounts determined under sub-rule (1) in respect of ‘D1’ and ‘D2’ exceeds the aggregate of the amounts calculated finally in respect of ‘D1’ and ‘D2’, such excess amount shall be claimed as credit by the registered person in his return for a month not later than the month of September following the end of the financial year in which the completion certificate is issued or first occupation takes place of the project.
(4) In case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the Act, the input tax determined under sub-rule (1) shall be calculated finally, for commercial portion in each project, other than residential real estate project (RREP), which underwent transition of input tax credit consequent to change of rates of tax on the 1st April, 2019 in accordance with Notification (11/2017) No. FD 48 CSL 2017 dated the 29th June, 2017, published in Karnataka Gazette, Extraordinary, Part –IVA, No. 601, dated the 29th June, 2017, as amended for the entire period from the commencement of the project or 1st July, 2017, whichever is later, to the completion or first occupation of the project, whichever is earlier, before the due date for furnishing of the return for the month of September following the end of financial year in which the completion certificate is issued or first occupation takes place of the project, in the following manner.
(a) The aggregate amount of common credit on commercial portion in the project (C3aggregate_comm) shall be calculated as under, C3aggregate_comm =[aggregate of amounts of C3 determined under sub- rule (1) for the tax periods starting from 1st July, 2017 to 31st March, 2019, x (AC / AT)] + [ aggregate of amounts of C3 determined under sub- rule (1)for the tax periods starting from 1st April, 2019 to the date of completion or first occupation of the project, whichever is earlier] Where, - AC = total carpet area of the commercial apartments in the project AT = total carpet area of all apartments in the project
(b) The amount of final eligible common credit on commercial portion in the project (C3final_comm) shall be calculated as under C3final_comm =C3aggregate_comm x (E/ F) Where, - E = total carpet area of commercial apartments which have not been booked till the date of issuance of completion certificate or first occupation of the project, whichever is earlier.
F = AC = total carpet area of the commercial apartments in the project
(c) where, C3aggregate_comm exceeds C3final_comm, such excess shall be reversed by the registered person in FORM GSTR-3B or through FORM DRC-03 in the month not later than the month of September following the end of the financial year in which the completion certificate is issued or first occupation takes place of the project and the said person shall be liable to pay interest on the said excess amount at the rate specified in subsection (1) of section 50 for the period starting from the first day of April of the succeeding financial year till the date of payment;
4
(d) where, C3final_comm exceeds C3aggregate_comm, such excess amount shall be claimed as credit by the registered person in his return for a month not later than the month of September following the end of the financial year in which the completion certificate is issued or first occupation takes place of the project.
(5) Input tax determined under sub- rule (1) shall not be required to be calculated finally on completion or first occupation of an RREP which underwent transition of input tax credit consequent to change of rates of tax on 1st April, 2019 in accordance with Notification (11/2017) No. FD 48 CSL 2017 dated the 29th June, 2017, published in Karnataka Gazette, Extraordinary, Part –IVA, No. 601, dated the 29th June, 2017, as amended.
(6) Where any input or input service are used for more than one project, input tax credit with respect to such input or input service shall be assigned to each project on a reasonable basis and credit reversal pertaining to each project shall be carried out as per sub-rule (3).”.