GST liability on landowner as per notifiaction 4/2018 JDA

Hi,

GST liability would arise in the hands of landowner, for transfer of development rights, and to the developer, for rendering construction services. The time of supply when payment is received or when invoice is raised whichever is earlier.

The standard rate of GST for JDA is set at 18 per cent, the effective rate is 12 per cent only.

Hi,

Yes, the landowner will be liable to GST. GST will need to be paid at the time of invoive or when the payment is received, which is earlier.

Hi

yes landowner liable to pay GST,it is to be paid at time of invoicing or payment whichever is earlier. Effective rate for GSt is 12%.

Good Morning,

As I see in your above mentioned case, the land holder is transfering the rights in property and in return is getting a share in revenue on sale of the property to be constructed.

In your case GST liability will arise on both events. 

1) Sale of Rights in land by Land Owner to developer.

2) Construction Service provided by developer to Land Owner.

When you (Land Holder) will transfer rights in Land to developer, Gst will be levied on this transaction @ 18%. Time of supply will be considered to be the date on which the said developer transfer the possession certificate or similar instrument to you( Land Owner).

Now, even developer has to pay GST on construction service provided by him to you (land owner) @ 18%.

Now the question is, whether the developer can use ITC (input tax credit) of the GST paid to you on purchase of rights in Land. The Ans is YES. Developer can use the ITC, of gst paid to you for purchasing rights in Land, while discharging his output liability.

Third case is , is GST leviable on sale of this flats to Outside Parties? Ans is, As per GST Law, if an immovable property is sold before obtaining BUC, then GST is leviable at 12%. But if it is sold after obtaining BUC, No GST IS PAYABLE. So if you recieve any advance money on Bookings of these flats, before obtaining BUC, GST @ 12% will be leviable. Otherwise no GST will have to be paid on sale of these Flats.

Dear Sir,

Hope you are doing well !!

The crux of the GST notification is as follows:

When a developer enters into a development agreement with a Landowner, GST would become payable by the Landowner when the developer transfers possession or the rights in the constructed complex, building or civil structure, to the Landowner by entering into a conveyance deed or allotment letter.

Hence, when the Landowner receives a constructed property from the Developer in exchange for providing land, the Landowner would become liable for payment of GST. The GST rate applicable on such a transaction would be 18%.

Also, Supply of Construction Services by the Developer to Landowner (supplier of Development Rights) is a Supply for a consideration in the form of Transfer of Development Rights and therefore GST is payable by the Developer when he transfers possession of flats to the Landowner.

So, land owner as well as developer both are liable for GST.

Sale of Building after receipt of Completion Certificate is treated as neither goods nor service, that means not considered as supply and therefore GST is not applicable.

Yes, landowner will definitely get the ITC credit for the GST.

Thanks & Regards,

Payal Chhajed

The applicable GST rate for under construction flats, properties or commercial properties in land or undivided share of land is currently at 12% with full Input Tax Credit (ITC).

The actual GST rate for under construction flats, properties or commercial properties is 18%. However, 1/3 of 18% is deemed as the value of land or undivided share of land supplied to the buyer of the property.

Thanks & Regards,

Payal Chhajed

Under GST a registered person is liable to pay tax when time of supply is determined. Provision for determining time of supply is different for goods & services. 

In your case flats are qulafied as goods, so provision for determining time of supply for goods are as follows :-

The time of supply for goods shall be the earlier of the following -

• The date of issuing of invoice (or the last day by which invoice should have been issued) OR
• The date of receipt of Advance/payment

      - Whichever is earlier

For example:

Mr. X sold goods to Mr. Y worth Rs 1,00,000. The invoice was issued on 15th January. The payment was received on 31st January. The goods were supplied on 20th January.

Time of supply is earliest of –

1. Date of issue of invoice = 15th January

2. Last date on which invoice should have been issued  = 20th January

Thus the time of supply is 15th January.

What will happen if, in the same example an advance of Rs 50,000 is received by Mr. X on 1st January?

The time of supply for the advance of Rs 50,000 will be 1st January(since the date of receipt of advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will be 15th January.

In your case, rate is 18% on the amount you will receive from the developer. Yes you can avail ITC of the developer.

In case of JDA gst is liable to be paid by land owner to builder and the rate is generally 12% in case of construction.

Land owner can get credit only if the amount paid is for furtherance of business i.e. if the land or property was a business asset of the land owner then only he could claim ITC otherwise not.

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Thank you