I Lible to pay GST ???, If yes How % it ??? Hi, GST Experts, Please guide me. I (Kisandeo Nikam) am a Land Owner. I give a plot (1503 Sq.Fit.) to Developer for Development with a Rajistard Development Agreement. Here is Double FSI so Developer Aggrid to give me 2050 Sq.Fit. Sellable Ready Construction.That Construction use My self Residential only. Important - Here is no any Amount Give OR Take.(Without Refundable Deposit) 1) First Development Agreement & Power of Attorney Date is 07/05/2016 2) Mobadala RS 42,40,000/- (It's only shown for Gov.stamp duty) 3) Development Agreement of Developer & Me , Developer writing in the agreement that vat,tax,GST pay by writing giver. 3) Our GST Law Start from July 2017 4) Completion certificate issued from PCMC Carporation Date 20/05/2019 5) Till Today Our Final Agreement is not done . 6) Developer demand me to pay GST 18 % = (RS 7,63,200/-) , on our Mobadala RS 42,40,000/- (It's only shown for Gov.stamp duty) 7) So I Confirm from you That I Lible to pay GST ??? If yes How % it ??? 8) My Mobile number is 9850903917 if any fees I will be pay . 9) With Thanks & reply me as soon as possible. 10) Regards with Nikam Kisandeo.
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Sir, your query is been marked and forwarded to our expert. Hope to get solution by tomorrow morning.
Dear Kisandeo,
I have read your query and I am of the opinion, that the interpretation of Law relating to your query may vary. I need a single confirmation from your side, that whether the developer has served any written document to you for paying the GST @ 18% on collector rate or not. If yes, than you may please share it to me at rahul@cagupta.in or 9041471715
Hi Nikam !!! Your query is extensive in nature and can't be answered in generic one. However, I am trying to answer to the best we can. Please go through the following:
1. Since, this is a TDR cum FSI Case and the commencement date of project is before GST Regime and the completion date is after GST Regime, it is to be taxed under GST Regime only.
2. Further, under GST Regime, the govt. has implemented the new scheme for Real Estate Projects w.e.f. 01.04.2019. The new scheme is optional for those, whose project was started on or before 31.03.2019 but completion certificate is issued on or after 01.04.2019.
3. Thus, your case belongs to dual rates in GST regime too depending upon the case whether the developer has opted for old scheme under GST or the new scheme under GST.
4. To clear the definitions, as per your facts, we assumed that your project carpet area is nearly 139 Sq. Mtr. and thus it is not covered under Affordable Housing Project. Along with this, it is also assumed that it is a completely Residential Project without any commercial allotments is used by Developer.
5. If we talk about the old scheme of GST, the GST rate is 12% with ITC. The developer has the option to opt for old scheme under GST till 20th May 2019. If not opted by developer, it is deemed to be opted for new scheme under GST for real estate.
6. However, for the New Scheme under GST especially for Residential Real Estate Projects (RREP), in your case it is 5% GST without ITC. But it has certain conditions as follows:
6a. The developer has used the inputs from registered persons while constructing the building to the extent of atleast 80% of total inputs used.
6b. While calculating the 80% Condition, the value of Land, FSI, TDR, etc are excluded.
6c. The project must be commenced on or before 31.03.2019 and the completion certificate is awared on or after 01.04.2019
6d. Any shortfall in 80% limit of inputs purchased i.e. excess purchases from unregistered persons, to be taxed @ 18% GST under RCM on all inputs except cement which is taxed @ 28% GST under RCM by Developer.
7. However, as you said that the developer is asking for GST @ 18% is not correct in my opinion and I hope that they are applying the following clauses for applicability of 18% GST which is reproduced as follows: 1 [Chapter 99
Supply of services other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI) by an unregistered person to a promoter for construction of a project on which tax is payable by the recipient of the services under sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), as prescribed in notification No. 7/2019-Integrated Tax (Rate), dated 29th March, 2019, published in Gazette of India vide G.S.R. No. 260(E), dated 29th March, 2019.
Explanation.—
This entry is to be taken to apply to all services which satisfy the conditions prescribed herein, even though they may be covered by a more specific chapter, section or heading elsewhere in this notification.
CGST Rate - 9%
SGST Rate - 9%
IGST Rate - 18%
Conditions - NIL]
But after careful study of the above GST Tariff, it is applicable only on against upfront payment, which is absent in your case. But, it can be levied on stamp duty rate which is valid in all part. But if we look at the complete conditions in this tarrif, it refers to Notification No. 7/2019 - IGST dated 29.03.2019. and the Notification speaks for the shortfall part only which is already explained as above.
8. Please refer to Point 11 of FAQ issued by CBIC, which is attached in my reply herewith.
9. Notification No. 7/2019 dated 29.03.2019 of IGST Act is also attached herewith for your perusal and verification.
10. Notification No. 11/2017 dated 28.06.2017 of CGST Act is also attached herewith.
CONCLUSION
In my opinion, it can't be say that GST @ 18% is directly payable by you to developer. We recommend to clear the facts from Developer that whether they are paying under old scheme of GST or under New Scheme of GST for Real Estate and apart from this, you may also ask for the Legal Opinion from the Statutory Auditor of the Developer or some other professional for clarifying the applicability of GST @ 18% in your case. That legal opinion will be much convenient to clarify. Thanks. Disclaimer: The views are professionally commented by CA. Rahul Gupta based upon the limited data available. You may contact us at 9041471715 or rahul@cagupta.in
Ok Thanks.
Ok Thanks.