GST ON UNIT DISTRIBUTION BETWEEN PARTNERS IN SINGLE AGREEMENT

[Kalpesh Shah]

Querry :

Fact of the case :

One of my client is a Developer. It is a Partnership Firm, which undertook Project of Construction of Raw Houses. Now Project is almost complete but it will take time to get OC from Municipal Corporation. Now Partners have decided to distribute the unsold Row Houses in a Single Deed of Distribution. They are distributing total 5 Row Houses between 3 Partners. Each Row House Area is less than 60 Sq Mtrs Carpet Area and Value Less Than ₹ 45 Lakhs. But in Aggregate (Total of 5 Row Houses) Area Exceeds 60 Sq. Mtrs Carpet Area and Value Exceeds ₹ 45 Lakhs. All 5 Row Houses distributed in a Single Deed of Distribution.

Now my question is :

1. Rate of GST Applicable ? 1% or 5% ?

2. What if we mention in agreement Carpet Area and Value of Each Row House Separately ? Will the GST Rate Change ?

AI Summary

Developer Partnership to Distribute Unsold Row Houses; GST Rate Set at 1% Based on Individual Unit Criteria A developer, structured as a partnership firm, is nearing completion of a project involving the construction of row houses. The partners plan to distribute five unsold row houses among themselves through a single deed. Each house has a carpet area of less than 60 square meters and is valued under 45 lakhs individually, but collectively, they exceed these thresholds. The developer seeks clarity on whether the applicable GST rate is 1% or 5% and if specifying each house's area and value separately in the agreement affects the GST rate. A response indicated the rate would be 1% based on individual unit criteria.