GST on Hardship Compensation, Rent received from Developer

[Yogesh Ashar]

Dear All

I have a query with regards to GST on receipt of Hardship compensation, rent and other receipts received by a residential flat owner from a builder on redevelopment of society premises. Whether GST would be applicable for the receipts from the builder to the member. if yes then under what entry and the rate for same. whether a plea can be raised that the money received is not in the nature of furtherance of business hence no supply. Kindly guide.

Thanks in advance

CA Yogesh Ashar

AI Summary

GST on developer payments: classification as consideration or compensation determines GST liability on redevelopment receipts.
Whether developer payments to a residential flat owner on redevelopment are taxable depends on their character: amounts forming part of the agreed consideration in the redevelopment arrangement are likely taxable, whereas amounts characterised as liquidated damages or compensation may not be. Determination requires holistic review of the redevelopment contracts and the parties' arrangement rather than isolated analysis of individual receipts.