Gst on flats allotted to members

[shwetal oswal]

In case of self redevelopment by society itself, whether gst needs to be charged on flats allotted to existing members ?

[Amit Agrawal]

Yes. Gst needs to be charged on flats allotted to existing members in case of self redevelopment by society itself. Reference: Clause (aa) of Section 7 (1) of the CGST Act, 2017.

This is strictly personal view of mine and the same should not be construed as professional advice / suggestion.

[Ganeshan Kalyani]

Sir, if flat is allotted after completion certificate then GST is not applicable in view of Sch.III.

[Amit Agrawal]

In my respectful submission, following is taxable services as per clause (b) of paragraph 5 of Schedule II (which is excluded from preview of clause (5) of Schedule III):

"construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier."

And as per Explanation (2) thereunder, the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure

So, date of allotment of flat by the society to its members is not relevant when consideration there-against (even partly) is received by society from the members prior to issuance of completion certificate.

Now, in any redevelopment of the society, members first agree handling over their existing flats to the society (i.e. for demolition so as to start the redevelopment). And this very act of the members amounts to receipt of consideration (in kind) by the society from the members and same will always be before receipt of completion certificate of redeveloped flats.

Hence, I continue to have view that GST needs to be charged on flats allotted to existing members in case of self redevelopment by society itself irrespective of actual date of allotment of flats.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion. And I fully respect contrary views.

[shwetal oswal]

What will be the value of such flats? Will it be FMV as on the Date of agreement with the society or Date of allotment of flats ?

And time of supply in such case?

AI Summary

Taxability of redevelopment allotments: supply is taxable where consideration is received before completion certificate, including surrender in kind.
Supply of flats to existing members in a society's self redevelopment is taxable where consideration (including surrender of existing flats in kind) is received by the society prior to issuance of the completion certificate; if entire consideration is received only after the completion certificate or first occupation, Schedule III may exclude GST. Questions of valuation (FMV at agreement or allotment) and time of supply remain outstanding.