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GST ON DEVELOPMENT AGREEMENT

amol bramhankar (artical tranee) (261 Points)

25 February 2024

i am builder
i take one land for building development for 35/65 ratio any GST require to pay on development agreement

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5 Replies

Danish Abbas (153 Points)
Replied 25 February 2024

Is it for sale ?

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Kishor Lulla (965 Points)
Replied 25 February 2024

Lot of informatin will be required to sasfy your query.write entire project. lullakishor @ gmail.com

amol bramhankar (artical tranee) (261 Points)
Replied 26 February 2024

Yes for sale some shop , and flat

Danish Abbas (153 Points)
Replied 26 February 2024

And what about consideration Is consideration received full or partial before completion certificate obtained?

Money Money (383 Points)
Replied 26 February 2024

I see that you are a builder and you have entered into a joint development agreement (JDA) with a landowner for a 35/65 ratio. This means that you will get 35% of the constructed area and the landowner will get 65%.

According to the GST law in India, there are different rules and rates applicable for JDAs depending on the type and nature of the project. Here are some key points that you should know:

If you are developing residential apartments, you have to pay GST on the transfer of development rights (TDR) from the landowner under the reverse charge mechanism. The GST rate is 1% for affordable housing and 5% for non-affordable housing. The value of TDR is based on the value of similar apartments charged by you from the independent buyers nearest to the date of transfer of TDR. The GST liability arises on the date of completion certificate or the first occupation of the apartment, whichever is earlier12.
If you are developing commercial apartments, you have to pay GST on the TDR from the landowner at the time of supply. The GST rate is 18% and the value of TDR is the same as above34.
If you are developing a mixed project of residential and commercial apartments, you have to follow the respective rules and rates for each type of apartment. You can also claim exemption for the residential apartments based on the carpet area ratio12.
If you are paying the landowner partly in money and partly in constructed area, you have to pay GST on both the components. The GST rate and value for the constructed area component are the same as above. The GST rate and value for the money component are 18% and the actual amount paid respectively12.
I hope this information is helpful to you. If you have any further questions, please feel free to ask me. 😊