is RCM applicable on purchase of tdr, FSI? at what rate RCM is chargeable for tdr & FSI. ?can we take ITC of the same RCM paid?
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Quick Summary
This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) on the purchase of Transfer of Development Rights (TDR) and Floor Space Index (FSI). It explains that RCM is applicable when FSI is transferred to a promoter, and for TDR, it applies to the portion attributable to un-booked residential apartments on the completion certificate date. The GST rate is 18%, but the tax amount is capped at 1% or 5% of the apartment's value, depending on whether it's affordable housing. Importantly, Input Tax Credit (ITC) is available for RCM paid.
As per notification number 5/2019 central tax (rate), GST is required to be paid by the recipient if FSI is transferred by any person to the Promoter. The term promoter means same as defined in clause (zk) under section 2 of the Real Estate Act, 2016.
As per Notification 5/2019 CT (R) The Promotor is liable to under RCM on such proportion of value of TDR as attributable to residential apartment which remain un-booked on the date of issuance of Completion Certificate. So RCM is to be done on flats remain Un-sold on date of completion certificate obtain.
The rate of Tax is 18% subject to a tax amount which is limited to 1% or 5% of the value of apartment depending upon whether TDR is used for an affordable residential apartment or other than an affordable residential apartment.
Yes ITC is always available , when it is paid under Under RCM