New Abatement notification on construction, complex services

[Daya Shankar Agarwala]

Dear All,

 

To settle the confusion arising out of Notification No. 02/2013 dated 01.03.2013 which provided for 75% and 70% abatement criteria on construction of a complex etc. under Sl. No. 12 of Notification No.26/2012, Central Government has come out with a fresh Notification No. 09/2013 dated 8th May, 2013, to further amend Sl. No. 12 of Notification No. 26/2012 dated 20.06.2012 as follows:

 

“12.

Construction of a complex, building, civil   structure   or   a   part   thereof, intended for a sale to a buyer, wholly or       partly,  except              where      entire consideration             is             received                   after issuance of completion certificate by the competent authority,-   (a)  for  a  residential  unit  satisfying both     the     following            conditions, namely:–   (i)  the carpet area of the unit is less than 2000 square feet; and  (ii) the  amount  charged  for  the unit is less than rupees one crore;   (b) for other than the (a) above.

25 30

(i)    CENVAT     credit   on inputs  used  for  providing the taxable service has not been     taken    under     the provisions of the CENVAT Credit Rules, 2004;   (ii)    The  value  of  land  is included in the    amount charged from the service receiver.”.

 Note:

In earlier Notification No. 02/2013 dated 01.03.2013, for residential units, wordings used were ‘upto 2000 Sq. ft’ and ‘ or’ as shown below:

(i) for residential unit having carpet area upto 2000 square feet or where the amount charged is less than rupees one crore;  Whereas in the new notification no. 09/2013, for residential units, wordings used are ‘less than 2000 Sq. ft’ and ‘and’ as shown in the table above and satisfaction of both the conditions have been made compulsory to claim rebate of 75%.

As a result, while from 01.03.2013 to 7.5.2013, abatement of 75% will be available, if any of the condition of Notification No. 02/2013 is satisfied, with effect from 8^th May, 2013, abatement of 75% will be available only if both the conditions of Notification No.09/2013 is satisfied.

Conversely, w.e.f 08.05.2013, if any of the condition of N. No. 09/2013 is not satisfied, say carpet area of residential unit is 2000 Sq. ft or more OR the amount charged for the residential unit is Rs. 1 crore or more, then in such a case, 70% abatement will be available.

Example 1:

Carpet area= 1999 Sq. ft. (Condition 1 satisfied)

Amount charged: Rs. 1 crore (Condition 2 not satisfied)

 Abatement available: 70%

 

Example 2:

Carpet area= 2000 Sq. ft. (Condition 1 not satisfied)

Amount charged: Rs. 99 lacs (Condition 2 satisfied)

 Abatement available: 70%

 

Example 3:

Carpet area= 1999 Sq. ft. (Condition 1 satisfied)

Amount charged: Rs. 99 lacs (Condition 2 satisfied)

 Abatement available: 75%

       

In case of commercial properties, however, position remains same i.e. 70% abatement. 

Regards,

CA. D.S.Agarwala

M/s D.S.Agarwala & Co.

Chartered Accountants 

9/12, Lal Bazar Street, Block-C, 3rd Floor, 

Kolkata- 700001
Mobile:  +91-94330-97972

Office: 033-4005-3997
Email:   aga...@gmail.com

[mksin...@gmail.com]

Thanks for details

Total Apartment having 4 floors and each floor having 4 flat of @ 1050 sft (each flat). Hence, each buyer will get 1050 sft and toal sft for this property would be 16800 sft

Each flat cost 40 Lacs.

In this scenrario, Can I get 25% abatement

Please reply

Regards,

S Murali krishna

8978944559