GST for JDA Signed before 1st July 2017

Great set of questions on GST and JDA (Joint Development Agreement)! Let me address them point-wise:

1) JDA signed before 1st July 2017 — Is GST applicable?

• GST came into effect from 1st July 2017.

• Transactions entered before GST are governed by the earlier VAT/CST/Service Tax rules.

• However, if construction or supply of flats happens after 1st July 2017, GST applies on the supply of under-construction flats regardless of JDA signing date.

• So, GST is payable on the construction/services rendered post GST implementation.

2) Does the landowner need to pay GST on the allotted flat if kept for personal use?

• No GST is payable by the landowner as a recipient or buyer when they receive the flat under JDA.

• The builder is responsible for collecting and paying GST on the construction services supplied (flat).

• GST is on the builder's supply, the landowner is the recipient but the builder raises the invoice and charges GST.

• For personal use (not renting or commercial use), there is no GST on further use.

3) If the landowner sells the flat later, how is GST calculated?

• Sale of completed (ready-to-move) residential property is exempt from GST (per Notification No. 12/2017).

• Sale of under-construction property attracts GST.

• The landowner, when selling a flat after possession, is essentially selling immovable property which is exempt from GST.

• Hence, no GST on resale of ready flats.

• The sale price is decided by mutual agreement between buyer and seller; no fixed GST rate applies on resale of ready property.

4) GST rate on supplementary agreement flats handed over in 2021: 12% or 5%?

• GST rate on residential properties changed from 12% (without ITC) to 5% (without ITC) from 1st April 2019.

• Applicable GST rate depends on date of invoice and supply (not the date of agreement).

• Since handover is in 2021 (after 1st April 2019), 5% GST is applicable on under-construction flats (if opted for 5% slab).

• Builder insisting 12% may be referencing the older agreement, but GST is chargeable as per the date of supply/invoice.

• You can ask for revised invoice as per applicable rates.

5) Is builder correct to ask for GST payment before possession?

• Yes, GST is typically paid on issue of invoice, which is often before or at possession stage.

• Builder is required to collect GST and pay to Govt timely.

• Usually GST is part of payment milestones, so asking before possession is normal.

6) Do you pay GST to builder or Govt? How to ensure builder deposits GST?

• GST is paid to the builder as part of the invoice amount.

• Builder deposits the GST to government on monthly/quarterly basis.

• Landowners cannot pay GST directly to Govt; only the supplier (builder) can.

• To ensure builder deposits GST:

  • Ask for proper GST invoices with builder’s GSTIN and details.

  • Cross-check if ITC is claimed by landowner (if applicable).

  • You can verify builder’s GST return filings online through GST portal or via a GST practitioner.

  • If builder defaults, the landowner has limited direct recourse except through legal/tax notices.

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