GST Charged by Supplier of TDR in Tax Invoice

[Kalpesh Shah]

Respected Seniors,

Facts of the Case :

My Client is a Builder/Developer. He has purchased TDR from LLP. This purchase of TDR transaction is Exempt for Transferor as per Notification No. 4/2019, dated : 29-3-2019.

On this Purchased TDR, Builder/Developer is liable to Pay RCM on unsold Residential units at the time of Occupancy Certificate.

While issuing Invoice for TDR, Transferor (LLP) has issued Tax Invoice and levied GST @ 18% and uploaded the same invoice on Portal in GSTR-1. Contention of TDR transferor is that he has generated TDR from Surrendering Land for Road Construction. Hence he is liable to Collect GST @ 18%.

Querry :

1. Is there any specific bifurcation in GST Law where GST on Transfer of TDR is liable @18% forward Charge ?

2. Will there be any liability under RCM on unsold units at the time of OC, since GST @18% is already collected by landowner and paid to Government ?

Thanking you in Advance

AI Summary

Builder Faces GST RCM Concerns on TDR Despite Invoice Issuance; ITC Proportionate Use Allowed per Notification 4/2019 A builder/developer purchased Transferable Development Rights (TDR) from an LLP, which issued a tax invoice with 18% GST, claiming liability due to land surrender for road construction. The builder is concerned about reverse charge mechanism (RCM) liability on unsold residential units at occupancy certification, given the GST already paid. Responses indicate the builder, as a promoter, must pay GST under RCM on TDR or floor space index. However, if the LLP has issued a tax invoice, additional RCM tax may not be necessary, and input tax credit (ITC) can be proportionately availed as per Notification 4/2019.