Gst applicability to land owner and developer

[ShankarDurgaVaraPrasad P]

Good morning every body,

My query is -- My client is a builder, his nature of business is taking land from land owners for development and he constructs apartments. on 01/04/2017 builder and land owner came into an development agreement and in that agreement their ratio mentioned as 50:50. The land owner had the right to transfer his share of flats on his own. Whatever the capital gains and service tax(gst) liable in case of owner had to be born by the land owner himself. These were the points mentioned in the agreement. Completion certificate got by builder in the month of december 2018 . Now my query is this agreement done before introduction of gst. Whether gst applicable or not. if applicable what is tax consequence in the hands of land owner and builder. kindly give clarity and guide me. thanks in advance.

AI Summary

GST Applies to Developer-Landowner Agreements Post-July 1, 2017, Under Section 142(10) of CGST Act 2017 A builder entered into a development agreement with a landowner on April 1, 2017, with a 50:50 share of constructed apartments. The landowner is responsible for any capital gains and service tax. The builder received the completion certificate in December 2018. The query concerns whether GST applies to this agreement, which was made before GST's introduction. Responses indicate that GST is applicable for amounts received after July 1, 2017, per Section 142(10) of the CGST Act, 2017. Prior amounts covered by VAT or service tax are excluded. The discussion also references relevant circulars for further guidance.