GST on Joint Development Agreement(JDA)

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Pankaj Arora

Learner

3134 Points Joined September 2009

Please clarify me regarding GST Payment in JDA. As per Notification 4 of 2018 Land owner has to pay GST (18%) on supply of development rights to the Developer in exchange for transfer of ownership rights. The same notification says that developer is liable for payment of GST on the supply of development rights to land owner. Please clarify Who has to pay GST . Whether both have to pay? At What time they have to pay? In other words I understand that land owner has to pay GST when JDA is signed and development rights are given or passed on to developer. Developer has to pay GST when the apartments are handed over to land owner after completion in all respects.Some people are of the view that Developer has to pay GST at the time of JDV only as the number of apartments are demarcated in that.If both have to pay GST it will be much more(36%). I request you to kindly give me clarification on this aspect as the notification is not clear it covers both owner and developer in clause (a) and (b) Thanking you

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208298 Points Joined July 2016

As per the Notification No. 03/2019 dated 29/03/2019 GST on supply of constructed area given to the Land Owner in consideration of the development right is continues liable to GST.

Time of supply: –

As per the Notification No.06/2019 dated 29/03/2019 a promoter who receives development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project against consideration payable or paid by him, wholly or partly, in the form of construction service of commercial or residential apartments in the project or in any other form including in cash the liability to pay GST shall arise on the date of issuance of completion certificate or on its first occupation, whichever is earlier

Value of Supply: –

GST will be charged on total Amount charged for similar apartments in the project from the independent buyers, nearest to the date on which such development right or FSI (including additional FSI) is transferred to the promoter, less the value of transfer of land, if any.

Rate:-

GST will be paid @ 1% or 5% as the case may be.

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

In Addition to Above :
As per Notification 4/2019 CT (r)
Services by way of TDR is Exempted , Provided , the Builder is liable to pay under RCM on the proportion of value of TDR as attributable to Unbooked flats .

Rajan

AGM - A&F

26 Points Joined June 2015

What if the project initiated in 2017 and completion certificate received before 31st March 2019 and handing over possession to customers happens in June 2019.. There are unsold flats of Land owner on the completion date of march which got sold after 1st April as immovable property without GST and reversed proportionate ITC in books/returns. Now what is the GST on construction service to be calculated.