GST RATE ON LANDOWNER SHARE

[NAMAN DOKANIA]

A builder is constructing flats by entering into the development agreement in the year 2017 and opts for old rate of tax by filing of Annexure 4 before 01.04.2019, thus charging GST@12% to the customers

Now, the building is complete and he is handing over the Flat to the Landowner. What rate of GST shall be charged or payable and at what rate?? Whether the same will be 12% or 18%?

Please clarify with proper notification if possible.

[Shilpi Jain]

The rate of tax will depend on the valuation adopted.

If the first sale value is adopted i.e. a value which has land value included, 12% rate should be applied. Else in case a value where land value is not included, is adopted, rate of tax would be 18%.

AI Summary

Valuation method determines GST rate: if sale value includes land apply the lower rate, otherwise apply the higher rate.
GST on handing over flats to a landowner depends on the valuation adopted: if the adopted value is the first sale value that includes land value, the earlier opted lower rate applies; if the valuation excludes land value, the rate applicable to the non-land construction component applies.