GST on re - development

[Kaustubh Karandikar]

XYZ Co-Op Housing Society Limited has done Redevelopment Agreement with PQR (Developer). XYZ entered in – Redevelopment Agreement in July 2015, which was registered also. In Feb 2019 -Redevelopment was completed and Occupation Certificate was received. Now Developer is asking for GST for the NEW CARPET AREA @ CONSTRUCUTION COST @ 8% GST. Is the developer right in asking for GST?

[Alkesh Jani]

Sir,

I am of the view that once Occupation certificate or any other certificate issued by the competent authority (as it is different from state to state), it can be said that service is being completed and hence after the certificate no GST is liable.

Our experts may like to offer their comments.

Thanks

With Regards,

[Ganeshan Kalyani]

GST is applicable on milestone in construction service. If there is any payment made during GST era and the OC was also not received at the time of payment, then GST is applicable.

[KASTURI SETHI]

Dear Sir,

Will you mention some crucial terms and conditions of "Redevelopment Agreement" ? What do you mean by "redevelopment" here ? As per literal meaning, "there was already development of land" ? Then issue has to be examined in new perspective. There must be reason for asking for 8% GST by the developer ? Without going through the crucial clauses of the agreement, correct reply is not possible. Pl. revert.

AI Summary

Developer Demands 8% GST on New Carpet Area; Dispute Over Applicability Post-Occupation Certificate and During GST Era XYZ Co-Op Housing Society Limited entered into a redevelopment agreement with developer PQR in July 2015, which was registered. The redevelopment was completed, and an Occupation Certificate was received in February 2019. The developer is now requesting GST at 8% on the new carpet area based on construction cost. One respondent argues that GST is not applicable after the issuance of the Occupation Certificate, while another suggests GST is applicable if payments were made during the GST era before receiving the certificate. A third respondent requests details of the redevelopment agreement to provide an accurate assessment.