Applicability of Reverse charges on sale of a Residential Flat after completion certificate
This query is : Resolved
23 November 2023
(1) I have purchased residential Flat through a Sale Deed dated 05 Oct 2023
(2) Builder entered into a “Development Agreement with General Power of ” with Land Owner for “Construction of a Multi storied building”
(3) Occupancy Certificate dated 16-08-2023 received,
(4) The said flat was purchased on 05 Oct 23 after receipt of the Occupancy Certificate dated 16 Aug 23.
(5) Builder is stating that as per Notification No. 4/2019 – Central Tax (rate) on 29th March 2019 which added fresh entries 41A & 41B to the Notification No. 12/2017 – Central tax (Rate) 28.06.2017 as per which Builder is liable to pay GST under Reverse Charge basis on Transfer of development rights which is applicable on sft sold even after obtaining Occupancy certificate.
(6) On a plain reading of the Act, the above sale is exempted and GST is not payable as per Para 5 of Schedule III and Clause (b) of Para 5 of Schedule II. Fresh Entries vide Sl.No.41A & 41B added to Table vide Notification No.4/2019 dated 29 March 2019 also exempted the above sale. But Builder is still insisting for payment of GST.
I, therefore, request your good self to kindly issue me the following clarifications:
(i) Whether GST is liable to be paid or not on the above residential flat purchased after receipt of Completion/Occupancy Certificate.
(ii) If need to be paid, Pl. specify the amount to be paid.
(iii) If GST is payable under reverse charge basis as per entries 41 A & 41 B of above Notification as stated by Builder, what is the status of exemptions allowed as per Para 5 of Schedule III and Clause (b) of Para 5 of Schedule II.
Thabking you
(2) Builder entered into a “Development Agreement with General Power of ” with Land Owner for “Construction of a Multi storied building”
(3) Occupancy Certificate dated 16-08-2023 received,
(4) The said flat was purchased on 05 Oct 23 after receipt of the Occupancy Certificate dated 16 Aug 23.
(5) Builder is stating that as per Notification No. 4/2019 – Central Tax (rate) on 29th March 2019 which added fresh entries 41A & 41B to the Notification No. 12/2017 – Central tax (Rate) 28.06.2017 as per which Builder is liable to pay GST under Reverse Charge basis on Transfer of development rights which is applicable on sft sold even after obtaining Occupancy certificate.
(6) On a plain reading of the Act, the above sale is exempted and GST is not payable as per Para 5 of Schedule III and Clause (b) of Para 5 of Schedule II. Fresh Entries vide Sl.No.41A & 41B added to Table vide Notification No.4/2019 dated 29 March 2019 also exempted the above sale. But Builder is still insisting for payment of GST.
I, therefore, request your good self to kindly issue me the following clarifications:
(i) Whether GST is liable to be paid or not on the above residential flat purchased after receipt of Completion/Occupancy Certificate.
(ii) If need to be paid, Pl. specify the amount to be paid.
(iii) If GST is payable under reverse charge basis as per entries 41 A & 41 B of above Notification as stated by Builder, what is the status of exemptions allowed as per Para 5 of Schedule III and Clause (b) of Para 5 of Schedule II.
Thabking you
24 November 2023
1 No GST payable after issue of completion certificate.
2 No need for any GST payment.
3 Exemption applicable for you.
2 No need for any GST payment.
3 Exemption applicable for you.
25 November 2023
Thanq v much Sir. But Auditor of Builder states Reverse charge payment to be made by builder as per entries 41A & 41 B of 2019 Notification. Hence passing on to me.
25 November 2023
RCM payment can't be passed on.
No GST payable after completion certificate.
No GST payable after completion certificate.
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