In reference to your query please note as follows:
In case of provision of development rights given by the landowner to the developer, the same is taxable under RCM on unsold units portion in the hands of the developer. The taxability of the same would depend on whether the same is for residential units / commercial units / mix of both.
In so far as RCM liability is concerned on the owner share of flats, the same in addition to above would depend on whether the agreement of consideration is on allocation / area sharing or revenue sharing basis.
The rate applicable would again depend on the type of project, i.e. in case of commercial projects 18% GST is applicable; however in case of residential projects 18% GST on unsold portion only would apply subject to cap of 1%/5% as applicable on the value of the said unsold flats.
In a nutshell:
1. The agreement will attract GST.
2. builder will be paying RCM, however on how much and what portion would depend on the terms agreed upon between the builder and Land owner as also on the basis of consideration.
3. Owner would need to pay GST if he sells his flat before OC. In case sale if effected after OC no GST is leviable however applicable reversal of ITC would arise.
Please advise in case of any further clarifications.
Thanks & Regards,
CA Aditya Dhanuka.