RATE OF GST ON TDS IN RESPECT OF UNSOLD FLAT

[NAMAN DOKANIA]

What will be the rate of gst on flats remaining unsold at the time of completion certificate issuance. Will it be:

A) 18% on proportionate area unsold on the value of Development right(i.e. Value of similar flat at the time of tdr agreement) or

B) 18% - (1/3rd of land) i.e 12% on proportionate are unsold on the value of Development right (i.e value of similar flat at the time of tdr agreement)

In short whether value of land be deducted from the tdr rate??

[Shilpi Jain]

If your project is under new scheme and is a residential project which is eligible for exemption on TDR then the maximum gst on the unsold portion would be 5% on the sale value of the units closer to the completion date.

The rate of 5% takes care of the 1/3rd land deduction

[YAGAY and SUN]

Taxable @5%:-

Applicable to Non Affordable Residential Houses and Commercial House but which is a part of Residential Real Estate Project (i.e where Commercial Carpet area <= 15% of Total Carpet Area)

No Input Tax Credit is available in this case. The above said Tax Rates 5% are excluding land value which is 1/3rd of the Total Value as said in Notification No.11/2017.

[NAMAN DOKANIA]

Shilpi Ji .

It would be lower of 18% on prop value of unsold area & 5% on value of unsold flat at time of CC .. RIGHT??

My question was will it be 18% or 12%??

[deepak gulati]

The GST Rate applicable to development rights is 18% only i.e. no 1/3rd deduction in rate is allowed in case of development rights. Further such tax computed @ 18% will be subject to max. 5% of value of flat sold.

[Shilpi Jain]

Agree with Mr. Deepak

AI Summary

GST rate on unsold flats: competing views on treatment of development rights versus concessional residential exclusion at completion.
Issue: Whether GST on unsold flats at completion certificate should apply on development-rights value without land deduction or under a concessional residential rate excluding land. Commentary records two competing positions: one applying a concessional rate to eligible residential projects (excluding land value and denying input tax credit), and another treating development rights as taxable at the standard development-rights rate without permitting the land-value one third deduction but subject to a practical cap tied to the flat's sale value.