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

GST on TDR: supplier invoicing does not automatically eliminate promoter reverse charge liability when used for residential construction.
The core issue is whether GST on TDR is subject to forward charge when the transferor issues a tax invoice and whether the purchaser/promoter remains liable under reverse charge for unsold residential units at occupancy. Forum views diverge: one view requires the promoter to pay under RCM when TDR is used for residential construction; an alternative view accepts the transferor's tax invoice as forward charge, allowing proportionate input tax credit per government notification clarifications and necessitating ITC reversal to the extent of exempt supplies.