I am land owner having agreement with the builder. I sell my share of flats according to the development agreement. In this case who is supposed to pay GST to the government, land owner or the builder?
Hi
Landowner is required to pay GST on sale of his share of flats while the property is under construction. Land owner needs to take GST registration and charge such GST to the buyer of flat. The ultimate liability becomes the buyer's.
However, if flat is sold after completion of construction, no GST needs to be paid.
Hi,
Hope you are doing well !!
The primary liability to pay GST on landlord share of constructed area is on the supplier of service namely the developer. However as GST is a destination based levy to be borne by consumer, the developer could collect from landlord and pay GST to Govt especially when there is specific clause in JDA that tax such as GST to be paid extra by landowner to developer.
Thanks & Regards,
Payal Chhajed
Hi,
The Landowner needs to registered for GST.
Builder is liable to charge GST and collect the same from builder and then pay to the govt.
If you sell the flat after receiving the completion certificate and after you receive the possession of flat from builder you don't need to pay GST on such transaction.
GST will be applicable only in this case only on the share of land you transferred to builder for some flats and for that builder would collect GST from you and pay to government.
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Thank you
Hello Thanks for replying. Is there any specific law that gst on flats sold by land owner needs to be paid to the government by landowner only ? Or builder can collect it from landowner and file gst ?
If the landowner is selling the under construction flat, he becomes the service provider; buyer being the service receiver. Thus, GST has to be charged and collected by the land owner only. The builder cannot do so,
Hi,
Now if we turn whether the same is responsibility of land owner or of a developer, which entirely depending upon how your terms are decided with developer. however, it is pertinent to note that payment of GST is the responsibility of supplier of service i.e. developer by collecting it from the receiver. so accordingly you can check at your end.
Basically if you are selling your part of flats then you will have to pay GST why would builder pay GST on your share.
However you only need to pay GST if you transfer flat before getting the completion certificate and not after that.
Hi,
GST is an indirect tax, the burden of which is to be borne by the consumer of goods/ recipient of services.
There is no reverse charge on development services, thus owner is not liable to deposit anything with the government, however, the developer can recover the same from owner and this depends on terms of contract between the owner and developer.
So, the answer to your query lies in the terms agreed between you and developer in the development agreement.
Hi,
- If it is sale after OC and entire consideration is received after OC, then GST would be applicable.
- Is it is sale during construction, GST should be collected by the builder on the remaining construction from the ultimate buyer. Till date, builder has collected GST from you on the construction and after sale, it should be collected from the second buyer.
- Please take second opinion on this matter.
Thanks
