In accordance with Communication No 6/2019 of the Central Tax of 29 March 2019, the tax applies to services provided when the supplier provides the service by transferring development rights of residential or commercial immovable property. The supplier pays the amount of tax in accordance with Article 9 (3) of the CGST Act. Sir, on October 10, 2020, I entered into a development contract with the client for the land sharing base @ 38: 62. I have little doubt about the GST applicable in this transaction. 1. What will be the GST applicable to the closure of the project – no ITC 2 will be used in this builder/owner. Who must bear the GST – contracting authority or landowner 3. What is the applicable GST rate of affordable housing in which the carpet area < 1000Sft 4.Landloard receives its share of housing – does it have to pay GST if it sells the apartments after receiving the Certificate of Occupancy 5. If Landloard sells part of its housing shares before receiving OC, what will be the GST in force? Please clarify the above doubts with your expertise. Since Article 50C is a legal fiction and its scope and scope are limited to what is written in the provision. Therefore, this provision can only be invoked in the event of a transfer of land or buildings or both.
Their exploitation may not be extended to other evaluators, to other characteristics or to circumstances other than those mentioned therein. It was also decided that Article 50C could be invoked if development rights were transferred at the same time as the transfer of the land. It can be seen that there is a registered act of transmission. The additional rights granted would make no difference. As long as the condition set out in Article 50C, i.e. the registered transfer instrument in respect of the fixed asset, is other events or transfers or subsequent rights or liabilities Arif Akhatar Hussain v. ITO [2010 (12) IMT 91 – ITAT, MUMBAI] In the area-sharing agreement, the landowners enter into an agreement with the developer, whereby the landowner grants the developer the rights to develop the construction or development of a comp lexe. In return, the contracting authority undertakes to allocate part of the built area in the form of housing.
Where a developer has entered into a development contract with a landowner, the GST is paid by the landowner if the developer entrusts to the landowner, through the conclusion of a transfer deed or letter of award, the possession or rights of the complex, building or civil work constructed. Therefore, the legal principle that any advantage arising from land will be a part and parcel of land, i.e. real estate, is no longer applicable in the GST and the transfer of development rights is considered a service. The final tax debt on the provision of user rights for the construction of housing is less than the tax calculated after Stage 1 and Stage 2. For commercial housing, the final tax debt shall be calculated at 18% on the value referred to in paragraph 1A. If we look at the definition of the real estate project (in accordance with section 2 (zn) of the RERA law, the activity of development of land into land is included. Other GST laws also recognize this definition under RERA for the purposes of taxing real estate projects. This definition could therefore perhaps draw the attention of the authorities to the taxation of the sale of land under construction. If a continuous service were to be processed and, therefore, the completion of the event will determine the delivery period in accordance with the agreement In order to provide construction services with the real estate developer, under construction contract with home buyers. In addition, the GST applies to this work.
There is, however, a catch in the applicability of GST to the real estate transaction.. . . .