Landowner liable for GST on premises distribution under joint development agreement

The ruling determined that the landowner, as a supplier of taxable services through a joint development agreement with a builder, is liable to pay GST on the premises allotted for distribution among family members. The applicant's registration under the CGST Act and the nature of the agreement made him subject to GST obligations, as clarified by Notification No. 4/2018-Central Tax (Rate). The ruling emphasized the applicant's role as a supplier of development rights, affirming the tax liability on the allocated premises.

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Issues:
1. Liability of the landowner to pay GST on premises allotted for distribution among family members.

Analysis:
The applicant, a landowner, entered into a joint development agreement with a builder for a residential/commercial building. The key issue was whether the landowner is liable to pay GST on the premises allotted to him for distribution among family members. The applicant sought an advance ruling on this matter.

During the personal hearing, the applicant explained that he contributed only his land and, in return, received a share of 50% of the total flats constructed and 50% of the commercial construction. The construction was completed in January 2018.

The Authority for Advance Rulings considered the submissions made by the applicant and the relevant provisions of the CGST Act. The applicant was registered with GSTN for filing the application, indicating liability for registration. The applicant's agreement with the builder for the development of his land made him a supplier of taxable services.

Notification No. 4/2018-Central Tax (Rate) dated 25.01.2018 was examined, which states that persons supplying development rights to a developer against consideration in the form of construction services are liable to be registered. The applicant, as a supplier of development rights, was found liable for registration and tax payment.

The ruling emphasized that the applicant, as a registered person under the CGST Act, was liable to pay GST on the premises allotted to him for distribution among family members. The ruling was based on the applicant's role as a supplier of a taxable service through the transfer of an undivided share of land.

Considering the above analysis, the ruling concluded that the applicant, as the landowner, is indeed liable to pay GST on the premises allotted to him for distribution among family members. The ruling clarified the applicant's tax liability in this scenario.

In summary, the judgment addressed the liability of the landowner to pay GST on premises allotted for distribution among family members, based on the applicant's role as a supplier of taxable services through a joint development agreement with a builder.

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