APPLICABILITY OF GST IN REDEVELOPMENT SCHEME

This query is : Resolved

CA DIMPLEKUMAR V. SHAH (Querist)
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30 December 2019 IN REDEVELOPMENT SCHEME EXISTING MEMBER ARE GETTING FLATS WITH EXTRA AREA WITHOUT ANY CHARGE. THERE IS INCREASES FROM 65 SQ MTR TO 85 SQ MTR . WHETHER DEVELOPER HAS TO PAY GST ON ENTIRE MARKET PRICE OR ON ONLY ON EXTRA AREA GETTING BY EXISTING OWNERS OR SIMPLY NOT TO PAY ????? NEW FLATS ON NEW FLOOR SALE PRICE BELOW 45 LAKHS . WHAT ARE RATE OF GST WITH INPUT CREDIT & WITHOUT INPUT CREDIT ??? IF SALE PRICE ABOVE 45 LAKS WHAT WILL BE THE RATE OF GST??
CA DIMPLE SHAH

Rajesh Kumar

Rajesh Kumar (Expert)
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31 December 2019 The issue is complicated. GST is payable on development rights through reverse charge method. The builder is getting development rights, and we need to find value of development rights. Further, as construction services are provided to the flat owners- we need to find value of such supply. To a very large extent, value of such services depend upon the wordings of the agreement. Even, Income Tax implication on the said activities are complicated due to various methods. One should be careful in drafting such agreements.