In many parts of the country, there is a practice, with separate registers for land and separate for flat constructed. In such cases, therefore, there is often an evaluation problem. In the case of IN RE: M/S. KARA PROPERTY VENTURES LLP 2019 (3) TMI 924 – AUTHORITY FOR ADVANCE RULING, TAMILNNADUthe assesse has entered into two separate agreements, one for the sale of one share of undivided land and the other for the construction of complex services to the buyer, two separate counterparties being charged by the purchaser. A question was therefore asked about the tax measure. The AAR found that the two agreements co-exist and work simultaneously; Any agreement cannot be terminated without terminating the other. This is a single fully covered supply in 5 (b) Of Schedule II of the Central Goods and Services Tax Act, which makes this operation a “complex building” service, and therefore assumes that the GST can be collected 2/3 of the total value of the two agreements. Thus, this value is calculated taking into account the value of similar dwellings charged by the developer on the date when these operating rights are transferred when development rights have been transferred in the form of residential and commercial housing. Section 2 (102) of the CGST Act, 2017, Services are anything but goods. However, an activity that is not just a product cannot be considered a service if that dose of activity does not have a service element, as is understood in the commercial language. Therefore, the transfer of development rights cannot be considered a service. In this case, where the Land uses more than 15% for commercial purposes and in this case it remains proportional to the commercial space for land used for residential purposes, the TDR tax will be paid by the developer under the RCM.
In accordance with Communication 4/2019 – Central Tax (rate) dt. Dt. On March 29, 2019, the operating rights were exempted by development fees on April 1, 2019 or after April 1, 2019 for the construction of housing by landowners. However, this exemption is conditional on the sale of dwellings before the date of issuance of the year-end certificate or the first occupation of the project, as the case may be. JDA helps both the developer and the owner of the land with an initial investment for the fund-raising, partially avoiding stamp duty, the accelerated development of the property as capital is necessary only for the execution of the construction work, consideration for the lessor will be paid most often after the completion of the project. The value collected by the lessor on the delivery of TDR or open market value (perceived by the government during the collection of stamp duty) if such a TDR agreement has been entered into is charged. Sir, on October 10, 2020, I entered into a development agreement with the owner of the land-sharing base 38:62. I have little doubt as to the GST applicable in this transaction.
1. What will be the GST applicable to project comletion – In this owner do NOT claim ITC 2.Who should carry the GST – owner or landowner 3.What is the applicable GST rate for affordable housing, in the carpet area is < 1000Sft 4.Landloard receives its share of apartments – does it have to pay GST, while the sale of the apartments after receiving the certificate of occupancy 5. If the Landloard sells part of its share of apartments before receiving OC – What will be the applicable GST. Pls clarify the doubt with your specialized expertise. If we consider the definition of the real estate project (in accordance with Section 2 (zn) of the RERA Act, it includes the development of land in the land.