• twitter-icon
Unlimited Tax Return Filing


Apartment Owners to Give 18% GST on Buying Parking Space

18% GST Applies on Using Open Car Parking Space

The sale or right to use a parking lot is not naturally packaged with construction services, according to the West Bengal bench of the Appellate Authority of Advance Ruling (AAAR), supporting an earlier decision.

As a result, it won’t be considered a composite supply and will instead be subject to GST at a higher rate of 18%. Eden Real Estates, which is involved in the building of residential units, appealed the AAAR’s decision.

From April 1, 2019, Non-affordable housing projects without input tax credits (ITC) are liable to 5% GST. The builder has the option to pay GST at the previous rate of 12% with an Input Tax Credit for ongoing projects (like this one), meaning taxes spent on inputs can be offset. The GST duty that would have been payable would have been that of the primary supply of construction, which is lower, had the AAAR considered the transaction relating to the parking lot as a composite supply.

The implication of this decision, according to Anita Rastogi, principal (indirect taxation) at Price Waterhouse India, is that purchasing residences with parking spaces will cost more. Some builders can choose to be cautious and charge 18% GST for parking spaces.

Read Also: Impact of GST on Real Estate Sector in India

In this instance, the real estate developer argued that stamp duty was paid on the total consideration and that only flat buyers were granted a parking space. The AAAR bench noted, however, that potential apartment purchasers may or may not choose a parking space when booking their apartments. Therefore, the claim that the right to use an open parking spot is a composite supply that is inevitably linked to building services fails.

Applicant NameEden Real Estates Private Limited
GSTIN of the applicant19AABCE6856A1ZQ
Date22.12.2022
ApplicantMr. Ankit Kanodia, Authorized Advocate
West Bengal GST AAARRead Order

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
SAGINFOTECH PRODUCTS

Leave a comment

Your email address will not be published. Required fields are marked *

Follow Us on Google News

Google News

Latest Posts

New Offer for Professionals

Super Tax Offer

Upto 20% Off
Tax, ROC/MCA, XBRL, Payroll, Online GST

Limited Offer, Hurry

Big Offer for Tax Experts

Upto 20% Discount on Tax Software

    Select Product*

    Current GST Due Dates