Question

As per new rates w.e.f 01.04.2019 promoter of project has to purchase 80% of Input and input services from registered person otherwise promoter is liable to pay tax on RCM @18% on shortage. My question in this regards is as follow, 1. Dose GST paid on taxable value of purchase received from registered person, can be include in total purchase value for the purpose of above calculation ?For Example.1 ) Taxable value of Goods/service is 100/- & GST on the same 18/- hence total invoice value is equal to 118/-. Now which amount either 100/- or 118/- need to be consider for 80% calculation ? (As I am not eligible to take credit on Input & input service)

Answer

Facts of the case: For calculating purchase value of 80% of Input and input services from registered person, whether GST paid on taxable value of purchase is to be included in total purchase value.

Law Applicable:
Notification No. 11/2017 Central Tax (Rate)
Provided also that where value of input and input services received from registered suppliers during the financial year (or part of the financial year till the date of issuance of completion certificate or first occupation of the project, whichever is earlier) falls short of the said threshold of 80 per cent., tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of eighteen percent on reverse charge basis and all the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017) shall apply to him as if he is the person liable for paying the tax in relation to the supply of such goods or services or both;

Interpretation: For calculating value of 80% of inputs and input services from registered persons, the cost should be taken without tax because it is the ratio of goods purchased on payment of tax and goods purchased without payment of tax.    

Conclusion:  Only Taxable value of Goods/service i.e. 100/- needs to be considered for 80% calculation.

Further reply to ask a Question dated 24/08/2020

Question

Regarding HSN code of Load Body Containers: Please let us know what is load body container item > its use > material used to manufacture it.

The use of the container is to move FMCG Goods (vegetables,bottles, garments ect) > Material Used is M.S.Steel.

The size of the container is Length:1800 MM / Width:1450MM / Height 1420MM.

 2. Fixture Development Cost. : As regards Fixture it is the part which is being prepared as per the specification and drawing of the client and retained at our end we charge for the cost of development and it is one time process. 

Answer
Facts of the case:  HSN code & Tax rate for the following 1. Load Body Containers  2. Fixture Development Cost.

Conclusion:
 1. Regarding HSN code of Load Body Containers:  As per specifications provided by you, Load Body Containers are classified under HSN Code 7310 and taxable @ 18% vide Schedule No. III of Notification No. 1/2017 Central Tax (Rate) as follows:

2. HSN code of Fixture Development Cost: In case the invoice is raised for fixture and property of it is transferred to the customer, suppose if in future agreement is cancelled  and the customer will take fixtures, then Fixtures will be classified under HSN code 8466 and taxable @ 18% under Schedule III of Notification No.1/2017-Central Tax (Rate) as follows:

But if the property of the fixture is not transferred, then it will be classified under design and development service classified under SAC 9983 and taxable @ 18% vide s.no. 21 of Notification No. 11/2017-Central Tax (Rate):