Value of Development Rights in the hand of land owner promoter for discharge of GST under RCM

[hubert fernandes]

In formula prescribed under first proviso to Entry 41A of Notfication 12/2017- the Revenue vide F.No/354/32/2019 -dated 14/5/2019 has clarified that GST shall b e payable @ 18% on Development rights.

What value shall be adapted by the developer towards 'Value of Development Rights' for discharge of liability under RCM? vis a vis the formula ie GST payable on TDR or FSI (including additinal FSI) or both for construction of the project * carpet area of residential apartments / total carpet area of residential and commercial apartment in the project

Regards

Hubert

[Shilpi Jain]

For determining that value one could refer to the valuation rules, rule 27 i.e. open market value of the development rights

if not available then value of development service received from the developer

Else cost + 10%.

AI Summary

Value of Development Rights determined under GST for reverse charge: open market value, development service value, or cost plus margin. Determination of the Value of Development Rights for GST under reverse charge: use the open market value of development rights where available; if not, use the value of the development service received by the landowner/promoter; if neither is ascertainable, adopt cost plus ten percent as the taxable value for GST.