GST Liability under JDA for builder

Hi Krishna! Let me break down the GST liability under JDA for the builder in this scenario.

Background:

• Total flats: 100

• Flats to landowner: 30

• Flats sold before CC: 63

• Unsold flats at CC issuance: 7

• Sale consideration at development agreement (DA): ₹80 lakhs per flat

• Sale consideration at CC issuance: ₹100 lakhs per flat

• GST rates applicable:

  • 18% on value at DA (under RCM for landowner's flats)

  • 5% (under composition scheme for real estate) on value at CC for flats sold before CC

GST liability under RCM on builder for unsold flats:

GST payable = Lower of:

• (a) Value based on DA × 18% × proportion of flats unsold

• (b) Value based on CC × 5% × proportion of flats unsold

Calculation:

• (a) = 80 lakhs × 30 flats × 18% × (7/100) = ₹30.24 lakhs

• (b) = 7 flats × 100 lakhs × 5% = ₹35 lakhs

Lower of (a) and (b) = ₹30.24 lakhs

Conclusion:

Your calculation is correct. The builder's GST liability under RCM for the unsold flats is ₹30.24 lakhs, as per the rule that tax payable is the lower of the two values calculated.