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Gujarat AAR rejects concessional GST rate for an affordable housing project in a township

  • Jun 29, 2020 | Divita S Gupta

Gujarat AAR rejects concessional GST rate for an affordable housing project in a township

The Gujarat bench of the Authority for Advance Rulings (AAR) has denied the benefit of concessional GST rate for an affordable housing project in a township with a mix of other projects. A private developer had approached the AAR seeking an advance ruling on whether a particular project undertaken by the applicant could take the benefit of the concessional GST rate of 12%. The applicant is engaged in a project comprising two phases, and the second phase is an independent project for affordable housing and is eligible for the concessional 12% GST. The applicant claimed that a township is different from a standalone housing project. It is, in fact, an integration of various projects. Also, the entire area of the township cannot be considered for arriving at the specifications contained in the GST notifications for determining a project as affordable housing. The Gujarat bench of the AAR held that the township could not be considered as a standalone, independent housing project as both phases of development share a common entrance, common facilities and common land with each other. As such, the benefits of concessional GST rates to the second phase of the project of the township stand denied. Such a ruling will make it tougher for developers to claim the benefits of affordable housing and pass them on to the consumers in the future.


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.