GST on TDR

[Narayan Pujar]

Hi,

I have come across a transaction wherein the JDA has been entered in Pre-GST regime but the construction has been commenced and completed after 1-4-2019 [during new GST regime for real estate].

How will tax on the following be treated?

1. GST on development rights.

2. GST on construction services to landowners.

3. GST on sale of apartments to customers.

Will all or any be covered in ST with no implication under GST as the agreement was entered in Pre-GST?

AI Summary

GST on transfer of development rights hinges on timing of consideration receipt relative to project completion under the JDA.
Where a JDA was executed before GST but construction completed after GST, the key operative consideration is timing of receipt of consideration: transfer of development rights may be treated as receipt that triggers tax, and GST liability generally arises when consideration is received prior to issuance of the completion certificate or first occupancy. Case law and CBIC guidance cited treat transfer of development rights as consideration for construction services, with GST applying in cases where consideration was received before project completion; factual distinction of JDA execution date governs whether service tax or GST regime applies.