gst rate applicability on development of apartments

[RameshBabu Kari]

Dear Experts,

In case of real estate, land owner gives development rights to the developer/builder to develop the land owned by the landowner. The built up area of the complex/apartment shall be shared by the land owner and the builder upon an agreed ratio. In such case, What would be the gst rate applicable on the share of landowner as well as on direct sale of builder to others ? In this case, what would be the eligibility of ITC on the purchases of materials for construction to the builder ? What are the gst applicability in joint development agreement ?

and

If the land owner and construction of the appartments are the same, what gst rate cab applicable on sale of such appartment/complex ?

Please clarify with related provisions and notifications.

AI Summary

GST Rate on Joint Development Agreement Apartments Set at 18%; Input Tax Credit Eligibility Clarified Under Notification No. 04/2018-CGST. A query was raised regarding the applicable GST rate on the development and sale of apartments under a joint development agreement, where a landowner grants development rights to a builder. The discussion sought clarity on the GST rate for the landowner's share and direct sales by the builder, as well as the eligibility for Input Tax Credit (ITC) on construction materials. Responses indicated that the GST rate is 18% and referenced Notification No. 04/2018-CGST (Rate). The applicability of the same rate to both the landowner and builder was confirmed, based on the supply against consideration.