TaxTMI 
TaxTMI 
A buyer bought an apartment / flat which was under construction from the developer. An ‘Agreement to Sell’ was registered and stamp duty was paid on the entire consideration by the buyer. Now, before completion certificate was obtained, the buyer sold the apartment / flat to another person. Is the buyer liable to charge and pay GST on resale of the apartment / flat before completion certificate has been obtained for the same?
Whether GST is payable on resale of flat by a buyer before its completion?
21 May 2024 
4 Replies 
6737 Views Asked by
GST on resale of under construction property may hinge on transfer of rights versus supply classification and builder liability.
Whether GST is payable on transfer of contractual rights in an under construction apartment before completion turns on characterisation: one view treats the resale as a taxable construction related supply; another treats it as a mere transfer of the first buyer's rights while the developer remains liable for construction GST, invoking Schedule III exclusion. The transaction therefore raises potential disputes on supply classification, valuation and the presence of a business nexus sufficient to constitute a taxable supply. (AI Summary)
Whether GST is payable on transfer of contractual rights in an under construction apartment before completion turns on characterisation: one view treats the resale as a taxable construction related supply; another treats it as a mere transfer of the first buyer's rights while the developer remains liable for construction GST, invoking Schedule III exclusion. The transaction therefore raises potential disputes on supply classification, valuation and the presence of a business nexus sufficient to constitute a taxable supply. (AI Summary)