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

AI Summary

Clarification on GST valuation for development rights under RCM: Use open market value, services received, or cost plus 10% (Rule 27). A query was raised regarding the valuation of development rights for GST liability under the reverse charge mechanism (RCM) as per Notification 12/2017. The issue involves determining the value of development rights for tax purposes, specifically whether GST should be calculated on Transferable Development Rights (TDR) or Floor Space Index (FSI), including additional FSI. The response suggested using the open market value of the development rights, the value of development services received from the developer, or the cost plus 10% as per valuation rules, rule 27.