Land Owner Liability In Development agreement with Builder - GST Payment

1742 views 5 replies

nitin dhage

56 Points Joined September 2017

Hello Sir

Need your help and suggestion

I have entered into a development agreement with a builder to develop our land for residential apartment on 50:50 ratio. The development agreement and supplementary agreement is completed with the builder and the allotment of flat ( Land owner and Builder) share details is also registered with Sub-Registrar office at Hyderabad before 1 July 2017. The apartment is now under final stage of construction and possession certificate is not yet received.

Now Builder is advising us that we need to pay GST on our share of flats, request you to please advise is the GST applicable to us or not, as the supplementary agreement is already completed before the implementation of GST on 1st July 2017. Your help and your suggestions would be appreciated.

Request you to please revert with your advise. Thanks.

Note: In development agreement it was agreed that the builder would bear all the taxes and charges applicable for the development of apartment.

Thanks
Nitin

Replies (5)

nitin dhage

56 Points Joined September 2017

Hello Experts I am still awaiting your suggestion/ advise on my above given query on GST applicability on Landlord. Thanks.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209719 Points Joined July 2016

"Now Builder is advising us that we need to pay GST on our share of flats, request you to please advise is the GST applicable to us or not, as the supplementary agreement is already completed before the implementation of GST on 1st July 2017. Your help and your suggestions would be appreciated."

As per rules, you are supposed to pay SERVICE TAX along with interest and penalty, as the agreements were executed in that tax regime.........

nitin dhage

56 Points Joined September 2017

Thank you for your response. Could you please advise what would be the Service Tax percentage. The Apartment is still under construction and it would get completed by end of Dec '17 and possession certificate is still pending.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209719 Points Joined July 2016

Depends upon the registration of builder....... at normal rate it was 15%, otherwise composite rate was 4.5%, with 70% abatement.

Secondly, the applicability of ST or GST is based on work in progress for builder and not over agreement only.

nitin dhage

56 Points Joined September 2017

Hello Sir, Supplementary Agreement was executed With identification of flats for Landlord and Builder share and this was registered with sub-registrar office by paying registration fees on 1at April 2017 ( I.e before GST implementation date of 1st July 2017). The share of Landlord flats will be retained by Landlord and there is no sale transaction involved in the agreement. Builder advised us to pay GST at 12% of the flat market value. Kindly vadvise do we have to pay any GST for these flats to Govt/Builder. Your suggestion would be highly appreciated. Thanks. Regards Nitin