• GST and capital gains tax

i am entering into a JDA with builder where my share is 40 % of the apartments 

1) what would be the GST applicable when i sign the allotment letter, do I need to pay the builder at the time of signing ?
2) if I sell the apartments BEFORE completion certificate then can I RECOVER THE GST from the buyers or will the buyers GST again be deposited with the center
3) Will the GST be levied on the fair price of the land ( 40% of the land value or 100% of the land value ) or the expected price of the apartments 
4) what will be the capital gains calculated on , fair value of the land or apartment price ( if I sell them )
 what price be considered then if I paying the GST at the time of allotment ? 
5) if I retain some of the apartments do I still need to pay GST?

 thanks in advance
Asked 4 months ago in GST from Delhi, Delhi

Yes the developer would collect GST from you and this would be collected when he transfers possession to you and GST would be @5%.

If you sell apartment before completion certificate you need to collect GST from customer and deposit it with government and it can be a cumbersome task so try to sell after completion.

You are transferring 60% of rights to developer so he will collect GST on 60% of value of land because for him the consideration he received is 60% of land.

Capital gain will also be calculate at the time of transfer of possession and sale consideration would be fair value of flat received and you can claim exemption u/s 54F since you are transferring land.

Yes GST will be recovered by builder in any case.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
2216 Answers
19 Consultations

5.0 on 5.0

Hi

1. Yes,land owner has to pay GST to builder at time of taking allotment..

2.yes,GST can be charged from buyer,if sold before completion.

3 & 4.on expected price of apartment

5. At a time of taking allotment ,you have to pay gst on all your share .

 

 

Hope it helps

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

Hi,

 

1. Yes, when you (Land Holder) will transfer rights in Land to developer, Gst will be levied on this transaction.

Time of supply will be considered to be the date on which the said developer transfer the possession certificate or similar instrument to you( Land Owner).

 

2.If you sell the apartments BEFORE completion certificate then you will have to collect the GST from the buyers.

 

3. GST will be levied on 60% of the value of land.

 

4. Fair value of land.

 

5. Yes.

Payal Chhajed
CA, Mumbai
3165 Answers
41 Consultations

5.0 on 5.0

Hi,

1) In case of JDA, for the projects for which TDR transferred on or after 01.04.2019, liability to pay GST is shifted on the developer/builder and not on the land owner.

 

2) Selling of apartments by the landowner before obtaining completion certificate would attract GST in the hands of the landowner and buyer needs to pay for it.

 

3) GST will be levied on the 2/3 cost of the flat.

 

4) In case flats will be sold before obtaining completion certificate, capital gain will be calculated in the year of transfer on the stamp duty value of the property.

 

5) No.

 

Thanks

Vivek Kumar Arora
CA, Delhi
3162 Answers
162 Consultations

5.0 on 5.0

After 01.04.2019 if any project starts it has to collect GST @5% and they cant take ITC and since you have said you are going to enter into JDA now 5% rate would be applicable to you.

You can claim exemption in income tax u/s 54F but only for one flat and only when you own one flat when you show such capital gain.

You need to pay GST to builder for providing you construction service other than that no GST is required.

 

 

Naman Maloo
CA, Jaipur
2216 Answers
19 Consultations

5.0 on 5.0

Reply to your second question.

 

1) No GST to be paid by you at the time of signing of the JDA. Why you are using the word allotment?

2) Yes your understanding is correct.

3) Already replied in my previous answer.

4) Yes you can claim exemption u/s 54F in respect to capital gain.

Vivek Kumar Arora
CA, Delhi
3162 Answers
162 Consultations

5.0 on 5.0

Hi,

 

-You need to pay GST at the time of possession.

 

-5% without ITC is applicable to you.

 

-GST on fair price of land.

 

-You can claim exemption u/s 54F.

Payal Chhajed
CA, Mumbai
3165 Answers
41 Consultations

5.0 on 5.0

Hello,

 

1. Yes, GST is payable.

2. If you sell the apartments before completion certificate, this would attract GST and you will have to collect it from the buyers.

3. 2/3rd of the value of the apartment.

4. Capital Gain would be levied at the time of transfer of possession and consideration would be the stamp duty value of the apartment.

5. Yes, Builder will collect GST.

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1063 Answers
3 Consultations

5.0 on 5.0

For project starting after 1st April 2019, 5% GST without ITC benefits is applicable.

You can claim an exemption under Sec. 54F.

Even if you keep the flats, you will have to pay GST to the builder for his services.

 

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1063 Answers
3 Consultations

5.0 on 5.0

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