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

TDR tax liability hinges on possession transfer date; pre-1/4/2019 landowner liable, post-1/4/2019 developer liable under RCM; see s.63 Under Notification No. 04/2018 (25-01-2018) the tax incidence for TDR arises when the developer transfers possession/right in the constructed property back to the supplier of development rights by conveyance or allotment; liability therefore depends on that triggering event's date. For a JDA dated 01-09-2018, if the taxable event occurred before the reverse-charge regime effective 01-04-2019, the landowner may be held liable; after 01-04-2019 liability shifts to the developer under RCM. The department may issue demands and assess an unregistered landowner, including under section 63, subject to applicable turnover thresholds and facts.