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.

[Alkesh Jani]

Sir, Please refer Notification No. 04/2018-CGST (Rate) dated 25/01/2018.

[RameshBabu Kari]

Dear Alkesh Jani,

My question is not about time of supply. The query is very specific to the rate of gst which can be applicable on sale of apartment and does the same rate applicable to landowner for his share ?

[Alkesh Jani]

Sir, Answer is yes, as the supply against the consideration.

[Ganeshan Kalyani]

18% rate.

AI Summary

GST rate on apartment development applies equally to landowner and builder under supply for consideration guidance; notification referenced. The built-up share allotted to the landowner and the builder's direct sales in a joint development are treated as supply against the consideration and thus subject to GST; Notification No. 04/2018-CGST (Rate) is cited as guidance and respondents indicate the same GST treatment applies to both parties, with one reply mentioning an 18% rate, while questions on input tax credit eligibility remain only referred to the notification without further conclusion.