Gst on land cost in case of sale of flats

[Ravi G]

A builder has two scenario

1. He owns land (land held as stock) builds flats in it. He make separate land sale agreement and builders agreement. Is gst 5% payable also on land sale value as same will be reported as part of turnover?

2. Is only a power holder of land. Builds and sells flats. Sale of land is made as separate agreement. Collects and pays full to owner/retains marginal Amt in the land value. Wat is liability.

Is it like 7.5% gst rate and 1/3rd adjusted for land so its 5% payable without itc?

[Shilpi Jain]

Yes. The rate of tax is 7.5 percent with 1/3rd deduction thereby 5percent net rate.

How is the amount withheld by power of attorney holder towards land?

[Altamush Zafar]

1) The taxable value will be taken as 2/3rd of sale value at rate of 7.5%. Sale value will be including value of land.

2) I assume by power holder you mean to say that builder and owner of land are different so in that case there will be a developer agreement or transfer of rights in land. Will depend on the nature of contract.

No ITC for projects started after 1st April 2019

AI Summary

GST on land component: taxable value reduced to exclude land portion, with GST applied on the remaining value.
GST on the sale of flats treats the total sale price as inclusive of land, computes taxable value as two thirds of that price, and applies the GST rate on the reduced value; where the builder acts under a developer agreement or power of attorney the levy depends on the contractual nature of the transfer, and projects started after the notified date face restrictions on input tax credit.