GST on Development Right

[ChandrakantBacharam Ghevade]

Queries on Sale of Development Right

Development agreement in between 1st July 2017 to 31st March 2018

Whether rate of GST payable by owner of property is @ 18%?

Whether time of supply is immediate?

Development agreement between 25th April 2018 to 31st March 2019.

If Owner and Developer both registered under GST

Whether rate of GST payable by owner of property is @ 18%?

Time of supply would be at the time of possession or allotment letter, as per Notification No. 4/2018-Central Tax (Rate).

If the Owner is unregistered and Developer is registered under GST

What is time of supply?

If it immediate, then the developer will lose GST input credit because project fall under new regime of GST @ 1%/5% without input credit with effect from 1st April 2019.

If it is not immediate and time of supply is at the time of possession then whether Notification No. 04/2019- Central Tax (Rate), will applicable and the developer has to pay GST on reverse charge basis in proportion of unsold flat at the time of occupation?

Can unregistered person absolve from GST liability since it is not in the course of furtherance of business?

AI Summary

GST on development rights: time of supply and registration status determine rate, input credit and reverse charge obligations. Queries address GST treatment of transfer of development rights, focusing on applicable GST rate, the time of supply (immediate versus at possession/allotment), impact on developer input tax credit under reduced-rate regimes, and whether a registered developer must discharge tax on reverse charge for unsold units when the owner is unregistered or supply is deferred to possession.