Value on commercial building developed on sharing basis

[Narasimha MurthyR]

A developer constructed a commercial complex on development basis with the landowner with share of 50:50. But both the developer and landowner are not selling the constructed complex. After completion of the building, both the developer and landowner are leasing their share of building. In such a scenario, on what value the GST is required to be paid as there is no intention to sale the developed property in the instant case. It is clear that the rate of GST on commercial construction is 18% in terms of the Notification No.11/2017-Central Tax (Rate) as amended. Teh experts may please through light on this issue Thanks in advance.

AI Summary

Value of construction services for GST when developer and landowner share and lease property: taxability and valuation guidance sought.
GST liability arises where a developer constructs a commercial complex on a 50:50 sharing arrangement and both parties lease, not sell. The construction is a construction service by the developer to the landowner, making any consideration including transferable development rights taxable. Leasing commercial property is a taxable supply of service at the prescribed rate, and where the tenant is unregistered the supplier may be liable under the reverse charge mechanism. The author notes the rate notification and Schedule II exclusion do not clearly address valuation in this scenario and seeks authoritative guidance.