New Ruling makes Construction of Social Housing Projects an Exempt Supply

The Maldives Inland Revenue Authority has published Ruling G46 on 8 February 2018 which makes the  construction of housing projects under a social housing scheme, an exempt supply.

To qualify that project as an exempt supply, the GST registered party that undertakes the project must first provide the MIRA with a written document from the relevant government authority that indicates that the project falls within the scope of Section 20 (o) of the Goods and Services Tax Act – the section of the act that allows the sale of flats, land and buildings under social housing schemes to be treated as an exempt supply.

The party carrying out the construction and development of the project must apply for a separate GST registration with the MIRA within 30 days from the signing of the agreement or the commencement of the construction project, whichever comes earlier. The application must be made using the MIRA 116 form along with any documents specified in that form.

Ultimately, projects which are approved by the MIRA will be considered as an exempt supply – the GST registered person will not be required to charge GST on such project. However, they will not be allowed to claim input tax on materials and services sourced for that project.

In addition to this, if part of a construction project undertaken by a registered person fulfils the criteria in this ruling, that part will be subject qualify for exemption.