GST on TDR (Transferrable Development Rights)

[Kalpesh Shah]

My client purchase a TDR (Transferrable Development Rights) on 05/02/2019 for constructing a RREP. So, he will be liable to pay GST on RCM basis on TDR purchase from Unregistered Seller on unsold area of the project. The Tax officer has issued show cause notice regarding the payment of GST on TDR being the project was started for which TDR purchased from 01/07/2019 and completed on 25/06/2021 as per OC despite TDR was purchased before 01/04/2019.

Please give your valuable opinion on above matter supporting with any case law or judgement.

Thanks & Regards

AI Summary

GST liability on transferable development rights: RCM applicability, classification as goods or service, and exemption under Section 9 Buyer purchased transferrable development rights (TDR) before April 1, 2019 but project construction began after July 1, 2019 and completed June 25, 2021; tax authority issued show-cause seeking GST under reverse charge for TDR attributable to unsold area. Key legal issues: whether transfer of TDR is supply of goods or service, whether GST on TDR falls under specified exemptions (land/rights) or is taxable, whether reverse charge applies where seller is unregistered, and correct time/place of supply and liability when project commenced after purchase. Resolution depends on statutory classification of TDR, applicability of notifications/exemptions and tribunal/court precedents on GST treatment of TDR and RCM in similar fact patterns.