In rule 43 of the said rules,-
(i) in sub rule (1),-
(a) in clause (a), after the word, letters and figure “FORM GSTR-2”, the word, letters and figure “and FORM GSTR-3B” shall be inserted;
(b) in clause (b), after the letters and figure “FORM GSTR-2”, the word, letters and figure “and FORM GSTR-3B” shall be inserted;
(c) after clause (b), 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 paragraph 5 of the Schedule II of the said Act, the amount of input tax in respect of capital goods used or intended to be used exclusively for effecting supplies other than exempted supplies but including zero rated supplies, shall be zero during the construction phase because capital goods 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.”;
(d) in clause (g),- (A) after the letter and words “‘F’ is the total turnover”, the words “in the State” shall be inserted;
(B) Before the proviso, the following proviso shall be inserted, namely,- “Provided that in case of supply of services covered by clause (b) of paragraph 5 of the 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;
Explanation1: 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 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.”;
5 (C) in the proviso, for the word “Provided”, the words “Provided further” shall be substituted;
(e) after clause (h), the following clause shall be inserted, namely,- “(i) The amount Te 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.”;
(ii) for sub rule (2) the following shall be substituted, namely:- “(2) In case of supply of services covered by clause (b) of paragraph 5 of schedule II of the Act, the amount of common credit attributable towards exempted supplies (Tefinal) shall be calculated finally 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, for each project separately, 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, as under:
Tefinal= [(E1 + E2 + E3) /F] x Tcfinal, Where,- E1= aggregate carpet area of the apartments, construction of which is exempt from tax E2= aggregate carpet area of the apartments, supply of which is partly exempt and partly taxable, consequent to change of rates of tax on 1st April, 2019, which shall be calculated as under, - E2= [Carpet area of such apartments] x [V1/ (V1+V2)],- Where,- V1 is the total value of supply of such apartments which was exempt from tax; and V2 is the total value of supply of such apartments which was taxable E3 = aggregate carpet area of the apartments, construction of which is not exempt from tax, but 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;
Tcfinal = aggregate of Afinal in respect of all capital goods used in the project and Afinal for each capital goods shall be calculated as under, Afinal= A x (number of months for which capital goods is used for the project/ 60) and,-
(a) where value of Tefinal exceeds the aggregate of amounts of Te determined for each tax period under sub-rule (1), 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 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 aggregate of amounts of Te determined for each tax period under sub-rule (1) exceeds Tefinal, 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.
Explanation.- For the purpose of calculation of Tcfinal, part of the month shall be treated as one complete month.
(3) The amount Tefinal and Tcfinal all be computed separately for input tax credit of central tax, State tax, Union territory tax and integrated tax.
(4) Where any capital goods are used for more than one project, input tax credit with respect to such capital goods 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 (2).
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(5) Where any capital goods used for the project have their useful life remaining on the completion of the project, input tax credit attributable to the remaining life shall be availed in the project in which the capital goods is further used;”;
(iii) the Explanation shall be numbered as “Explanation 1” thereof and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:- “Explanation 2: For the purposes of rule 42 and this rule,-
(i) 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 (Central Act 16 of 2016);
(ii) the term “project” shall mean a real estate project or a residential real estate project;
(iii) 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 (Central Act 16 of 2016);
(iv) 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;
(v) 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 (Central Act 16 of 2016);
(vi) “Residential apartment” shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority;
(vii) “Commercial apartment” shall mean an apartment other than a residential apartment;
(viii) the term "competent authority” as mentioned in definition of “residential apartment”, means the local authority or any authority created or established under any law for the time being in force by the Central Government or State Government or Union Territory Government, which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property;
(ix) the term “Real Estate Regulatory Authority” shall mean the Authority established under sub- section (1) of section 20 (1) of the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2016) by the Central Government or State Government;
(x) the term “carpet area” shall have the same meaning assigned to it in in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2016);
(xi) “an apartment booked on or before the date of issuance of completion certificate or first occupation of the project” shall mean an apartment which meets all the following three conditions, namely-
(a) part of supply of construction of the apartment service has time of supply on or before the said date; and
(b) consideration equal to at least one installment has been credited to the bank account of the registered person on or before the said date; and
(c) an allotment letter or sale agreement or any other similar document evidencing booking of the apartment has been issued on or before the said date.
(xii) The term “ongoing project” shall have the same meaning as assigned to it in 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;
(xiii) The term “project which commences on or after 1st April, 2019” shall have the same meaning as assigned to it in 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;”.