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ITC OF GST CHARGED BY DEVELOPER ON CONSTRUCTION SERVICE, Goods and Services Tax - GST

Issue Id: - 117274
Dated: 10-6-2021
By:- NAMAN DOKANIA
ITC OF GST CHARGED BY DEVELOPER ON CONSTRUCTION SERVICE

  • Contents

1. When do Developer charges GST on Flats given to landlord at the price of the first booking?? At the time of Date of AGREEMENT or on the date of completion certificate??

2. If It is on the date of completion certificate, then how can we plan so that the landowner can take the input tax credit of the gst charged by the builder??

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Showing Replies 1 to 6 of 6 Records

1 Dated: 10-6-2021
By:- Rajagopalan Ranganathan

Sir,

According to para 1A of Notification No. 12/2017-D.T. (Rate) dated 28.6.2017 as amended "Value of supply of service by way of transfer of development rights or FSI by a person to the promoter against consideration in the form of residential or commercial apartments shall be deemed to be equal to the value of similar apartments charged by the promoter from the independent buyers nearest to the date on which such development rights or FSI is transferred to the promoter. gst is payable by the developer on the price charged by the him from the independent buyers nearest to the date on which such developement rights nor FSI is transferred to the promoter.

In view of the above, consideration of date of completion certificate for determining the value of flats given to the land owner will not arise.

Therefore


2 Dated: 10-6-2021
By:- NAMAN DOKANIA

Sir, My Question pertains whether the builder i.e. Developer will charge GST on flats given to Landowner on the date of completion certificate or on the date of Agreement? Please re-iterate on this point please.


3 Dated: 11-6-2021
By:- Shilpi Jain

The liability to pay is on completion though there is no bar on the developer from discharging the liability before this date by issuing a tax invoice to enable the landowner to take credit. This is also a proposed clarification in the 43rd council meeting.


4 Dated: 11-6-2021
By:- Rajagopalan Ranganathan

Sir,

If the flats are given to land owner after obtaining completion certificate no gst is payable by the developer. gst is payable only under construction flats handed over to the land owner.


5 Dated: 13-6-2021
By:- ABHISHEK TRIPATHI

Dear Sh. Naman Ji,

GST will be charged in accordance with section 12. In your case, It may be the date of invoice or date of payment.

Now coming to ITC, you may take ITC in accordance with Section 16/17, there is no bar on ITC subject to these provisions.

Note: If you have unsold flat(s) at the time of getting the completion certificate then you have to reverse the ITC proportionately. Usually, many developers don’t reverse the proportionate ITC.


6 Dated: 13-6-2021
By:- ABHISHEK TRIPATHI

Correction: Few developer don't reverse ITC.


1

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