GST on JDA

GST on JDA

Hi,

We and our family members (3 parties for our better understanding let's consider them as A, B, C) have entered into a JDA on 50:50 area sharing basis with a builder in hyderabad in Nov 2017, total no. Of flats 10
Builder 5 flats, land owners 5 flats( A gets 2.5 flats, B gets 1.25, C gets 1.25) only the 1 flat which is divided is for sale, and of course the builders share of 5 flats,
Rest all 4 flats are NOT INTENDED FOR SALE

the project is still an ongoing project on MAY 2020the builder has asked us to pay a gst on Open market value and hasn't produced any invoice or receipt

1.should we pay on open market value?
2.can we pay without a receipt/invoice?
3.Since I'm C I'm NOT selling my flat, I'm I liable to pay gst?
4. Should I be paying 12% as gst and will there be any valuation viable due to COVID -19

Thanks in advance for all your replies ????

Asked 5 years ago in GST

There are two services here:

1. You are providing rights in your land to builder and builder is providing you construction service.

So whether you sell your flat or not GST needs to be paid for construction service.

Secondly you need to pay him GST on the construction service provided so he needs to provide you an invoice for that. It's advisable to ask for invoice. Thirdly now it's builder responsibility to pay GST on your service i.e. providing him land rights on reverse charge basis.

2. Didn't get your last question.

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

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Dear Sir,

Hope you are doing well !!

It is advisable to take a phone consultation for detailed discussion.

Payal Chhajed

CA, Mumbai

5189 Answers

302 Consultations

Talk to Payal Chhajed

1. Yes, you will required to pay GST on open market value of construction services provided on your share of flats. However, builder is required to give you proper invoice with GST.

2. No, you should not pay without invoice.

3. Yes, you are liable for your share o flat as mentioned in point 1. Also, that one flat which is divided, if you are selling that flat under construction, then you are also required to pay gst on the sale value of that flat.

4. The rate of tax could be 1%/5%/12% depending upon the classification of project as REP or RREP and the option selected by the builder.

Lakshita Bhandari

CA, Mumbai

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942 Consultations

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Hello,

1. Yes, you would be liable for GST on the construction services for your share of the flat.

2. No.

3. Yes, you are liable for GST on the construction services received on your flats. That one flat if being sold before construction completion would also be chargeable to GST.

4. That depends upon the option opted by the builder and the type of project.

I hope this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Hunny Badlani

CA, Madhya Pradesh

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- As the supply of TDR was made prior to 01.04.2019, tax liability would be payable on the date of possession or allotment letter or conveyance deed. The value of supply would be construction services. The liability to pay GST is on the landowner on the proportionate share belonging to each of you. A,B and C should apply for GST registration individually and pay GST@12% on the construction services received by you against transfer of TDR to builder.

Vivek Kumar Arora

CA, Delhi

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I'm a land owner and we have entered into a jda with builder on area sharing basis, the builder is asking us to pay 12% on gst for our flats 
Upon enquiry he has told that he has opted for old gst rate 
-for which he has booked 1 flat for potential buyer taking a intial amount. (The total no of flats are 10) 
-Upon further enquiry he has told that the flat booking was cancelled after 1/4/2019 (due to other circumstances) 
-And legally the first registeration is in October 2019

Question. 
1) Can the builder opt of old rates even after cancellation?
2) Can the option be reversed( as he doesn't qualify for it after cancellation) 
3)Can we pay 5% as per new rates?

Asked 5 years ago

Transfer of development rights from the landowner to a developer is taxable. KAR ADRG/199/2019) has said that the activities envisaged under the JDA between a developer and land owner amounts to a supply of service to the latter and is therefore liable to be taxed under GST at 18%