GST in case of Affordable Residential Apartments

[Varsha Chatterjee]

Hi, Experts. If a Builder entered into an Agreement with a Land Owner to Construct a Residential Apartment of 10 Flats (G+4). The Builder purchased Bonds to acquire permission for the Construction of the Top-Most Floor in the Apartment, which handed-over the Ownership of the 2 Flats on the Top-most Floor to the Builder. So, the Land Owner is entitled to 4 Flats in the Apartment and the Builder has ownership of 6 Flats according to the Agreement (Joint Development Project). The Land Owner and the Developer do not wish to retain any of the Flats for Personal Use after the Construction of the Apartment and want to sell all the 10 Flats according to their Ownership. The Construction of the Apartment is Finished and the Occupancy Certificate for the Apartment is issued (none of the 10 Flats were sold at the time of issuance of the Occupancy Certificate). (The Project is located in a Non-Metropolitan City in Andhra Pradesh and can be classified under "Affordable Housing" i.e., Carpet Area<90 Sq.Mts & Sale Price

AI Summary

Joint development apartment taxation raises competing views on construction-service GST, unsold units, input tax credit, and development-rights reverse charge.
GST implications in a joint development residential project are discussed for apartments allocated to a landowner and developer but unsold when the occupancy certificate is issued. The views differ on whether the developer pays GST on construction services supplied through apartments transferred to the landowner and on unsold retained apartments. The discussion also addresses the absence of input tax credit and the developer's possible reverse-charge liability on the value of transfer of development rights.