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TMI Blog2022 (9) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... he developer-promoter shall arise at the time of transfers possession or right in the constructed complex or constructed flats and not at the time of receipt of development rights. The tax on the portion of constructed area shared with the land owner-promoter has to be paid by developer-promoter . The applicant i.e., the land owner-promoter will claim such tax as ITC as described above whenever he makes further sale of such property before issuance of completion certificate. Further according to the conditions laid down in Notification No. 04/2018 the liability to pay tax on consideration received by the developer-promoter in form of development rights shall arise at a time when such developer-builder transfers possession or right in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted 4. Brief facts of the case: M/s. Maddi Seetha Devi, the applicant, is a registered tax payer and a land owner and has entered into a development agreement with M/s. PHL and entrusted the land to M/s. PHL by way of a joint development agreement in the year 2016. M/s. PHL will hand over 27% of the developed property to the applicant. The applicant is desirous of clarification regarding liability of transfer of development rights and time of supply under GST. Hence this application. 5. Questions raised: 1. Whether transfer of land or transfer of 'development rights' to the developer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e land, the liability for payment of GST/ service tax arose either: a) Immediately on receipt of development right and conveyance of the allotment of the share of constructed area; or b) Upon handover of the constructed place. 7. Discussion Findings: The submissions made by the applicant indicate that they as land owner-promoter have entered into a joint development agreement (JDA) with the developer-promoter on area sharing basis for Residential Real Estate Project (RREP) in Jan 2016. The GST structure on real estate services has been greatly altered with effect from 01.04.2019 through Notification No. 03/2019 and Notification No. 04/2019 dated: 29.03.2019. Further as per the provisions contained in clause-2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is transferred to the land owner-promoter. 8. The ruling is given as below: In view of the above discussion, the questions raised by the applicant are clarified as below: Questions Ruling 1. Whether transfer of land or transfer of 'development rights' to the developer by the landowner is to be considered as receipt of consideration by the developer as per Notification No.04/2018-CT (Rate) dt.25.01.2018 and as per the clarifications issued after introduction of GST and prior thereto towards the construction of flats in the residential complex to be taken up by the developer for the landowner? Yes. Transfer of development rights by the landowner to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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