Tax liability of un registered landowner on TDR( transfer of developmental rights)

[NUKALA KUMAR]

JDA excecuted on 1-9-2018 

Land owner is unregistered 

As per 04/2018 notification liability to tax on TDR is land owner

AS per 04/2018 notification its only the registered person liable to pay tax on TDR

After 1-04-2019 liability has been shifted into the hands of developer under RCM

Q1: Can department issue notice to un registered land owner demanding for tax?

Q2: can department assess the un registered landowner under section 63 of GST ACT?

[Rajan Kumar and associates]

As per N. No. 04/2018 CT(R) dt. 25-01-2018, the liability to pay tax for transfer of development rights, shall arises at the time when the developer, builder, construction company or any other registered person, as the case may be, transfers possession or the right in the constructed complex, building or civil structure, to the person supplying the development rights by entering into a conveyance deed or similar instrument (for example allotment letter).

Q1. If the Liability to pay tax arises before 31-03-2018, yes.

Q2. Yes, if his AATO exceeds 20lakh.

[Shilpi Jain]

4/18 is not a levy notification. It is only a procedural notification stating when the liability arises. No bar on department from issuing demand on unregistered LO.

AI Summary

Tax liability on transfer of developmental rights may attach to developer or unregistered landowner depending on timing and turnover.
Liability for tax on transfer of development rights is determined by the moment when possession or the right in the constructed complex is transferred to the person supplying development rights by a conveyance deed; that timing decides whether the supplier or the developer is the taxable person, and administrative demands or summary assessment may be issued against an unregistered landowner if liability arose in the landowner's hands and registration thresholds for chargeability are met.