GST POT on Area sharing against Agreement for Sale

[Kalpesh Shah]

Respected Experts,

I have Querry as follows :

Facts of the case :

One of My client is a Developer. He has entered into an Agreement for Sale for Land alongwith FSI against consideration payable in the form of Constructed Units to be given to Landowners.

This Agreement for Sale will be converted into Conveyance Deed by paying 2% stamp duty in the future after transaction gets over.  

Querry :

1. What will be point of Taxation for units of Landowners ? At the time of OC or at the time of Executing Agreement for Sale ?

2. Whether GST RCM applicable on Unbooked Residential units at the time Receipt of OC ?

Thank you in Advance 

AI Summary

GST liability on units allotted to landowners arises on completion/first occupancy certificate; reverse charge and valuation rules may apply Developer entered an agreement to transfer land with FSI in exchange for constructed units to landowners; conversion to conveyance deed planned later. Forum answers indicate GST on units allotted to landowners arises on issuance of completion/first occupancy certificate unless an earlier taxable event occurs; unsold units at that stage may attract reverse charge on the developer within statutory time. Valuation likely follows open market value (or cost plus 10% if not identifiable). Characterisation as joint development versus sale/conveyance depends on agreement terms, and if the developer constructs all units they may face GST exposure on the entire project.