Liability on TDR/FSI under GST

[Shreyansh Mehta]

What should be the liability of TDR purchase in Cash under GST and when should be it is payable??

As per my knowledge we have to calculate TDR liability at the time of receiving Completion certificate and it should be payable on remaining unsold flats. But i am confused because i had purchase TDR by paying consideration in Cash and i have to pay liaibility on RCM basis at the time of completion certificate. If i agree to share area or revenue then my liability will be determine at the time of completion certificate in area sharing and in revenue sharing at the time of revenue earned.But if i purchase TDR in cash then what should be my liability and when should i have to pay???

Please guide me regarding my issue

Thankyou

[Padmanathan KV]

A. Assuming that you are a promoter, you are liable to pay GST on RCM, on proportionate value of TDR attributable to the residential apartments, which remain un-booked on the date of issuance of completion certificate, or first occupation whichever is earlier.

A.1. RCM shall be calculated as:

GST payable on TDR for construction of the residential apartments in the project but for the exemption contained herein x (carpet area of the residential apartments in the project which remain un- booked on the date of issuance of completion certificate or first occupation ÷ Total carpet area of the residential apartments in the project)

A.2. The tax payable as calculated above shall not exceed 1% of the value in case of affordable residential apartments and 5% of the value in case of residential apartments other than affordable residential apartments remaining un-booked on the date of issuance of completion certificate or first occupation.

B. The liability to pay GST on the said portion of the TDR shall arise on the date of completion or first occupation of the project, as the case may be, whichever is earlier.

[Shilpi Jain]

Whether the TDR is in respect of a residential project or commercial?

If the TDR is w.r.t. residential, liability w.r.t. TDR on unsold units will arise on issuance of completion certificate/first occupation whichever is earlier.

If for commercial then the liability will arise a the time of payment (assuming consideration is paid upfront.)

AI Summary

GST on Transferable Development Rights: Timing and Rates for Residential and Commercial Projects under Reverse Charge Mechanism. A user inquired about the GST liability on the purchase of Transferable Development Rights (TDR) in cash, particularly regarding the timing of payment. One response clarified that if the TDR is for a residential project, the GST is payable on a reverse charge mechanism (RCM) basis for unsold flats at the time of the completion certificate or first occupation. The tax is calculated based on the proportionate value of un-booked residential apartments and should not exceed 1% for affordable housing or 5% for other residential units. Another response highlighted that for commercial projects, liability arises at the time of payment.