What is the tax code for the building material of housing developer (exempt supplies)
Assuming you are residential and commercial properties developer, and the residential and commercial properties are both main business for your company(non-incidental). This will make you as partially exempt trader, because residential properties is exempt supply and commercial properties is standard-rate supply.
When you build residential house, the building material in used is solely for residential housing project. This mean we can “directly attribute the cost of the building material to these residential houses(non-incidental exempt Supply)”. In the sense of this, TX-N43 is more appropriate.
And with this tax code, you are not eligible to claim the input tax on the building material.
Tax code = TX-RE (6%)
For a housing developer who is a GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader). that is not directly attributable to the making of taxable or exempt supplies (or commonly known as residual input tax). Example includes operation overhead for a development of mixed property (properties comprise of residential & commercial).
If the housing developer is making an exempt supply, input tax credit cannot be claimed and no GST is to be charged on the exempt supply.