GST on Joint Development of Property


Applicant, Land Owner entered in to development agreement with Builder to develop and promote multi storied residential apartment cum commercial building. Land owner was entitled to get share of 50% of total 12 flats constructed and also 50% share out of 4,000 SFT of commercial construction.

AAR upheld that N. No. 4/2018-CTR dated 25-01-18 provides that the person who supplies development rights shall pay central tax at the time when the developer / builder transfers possession or right in the building by way of conveyance deed or similar instrument. Hence, applicant being the person who has supplied development rights to a developer in respect of his land, is liable for registration and payment of tax.

The applicant has not submitted details with regards to transfer of possession of the constructed flats / commercial area or allotment order of the same and hence it was presumed by Authority the possession of the constructed flats / commercial area has not been handed over to the applicant as on date.

Sri Patrick Bernardiz D’sa – KAR ADRG 29/2018 (AAR – Karnataka) – Dated 28-11-2018