Part I: Development rights transfer service – tax rate, exemption, valuation, self-identification mechanism, delivery date Responsibility for payment of the central tax on said share of the operating rights or ISPs, or both, as mentioned above, arises on the day of completion or first occupation of the project, depending on the case, depending on the previous date. This entry allows the government to limit the upstream tax credit on development rights. Because it blocks vouchers or services or both received by a person in the construction of real estate. However, development rights are obtained with regard to construction. Therefore, the tax credit on the transfer of development rights can be required. Under the GST, the concept of “supply” is very broad, including bartering or exchanging goods or services; The term “services” is defined as something other than goods. In addition, Appendix III of the CGST Act, 2017, excludes the sale of supplied land. There were some uncertainties about the fiscal capacity to transfer development rights under the Common Jid, whether or not they are subject to the GST. However, Communication 4/2018 specifies that the transfer of operating rights from the owner of the land to a real estate developer is taxable. Thus, this value is calculated taking into account the value of similar dwellings charged by the developer on the date when these operating rights are transferred when development rights have been transferred in the form of residential and commercial housing. Sometimes the landowner can have the construction built for his own use for the purposes of his residence and agrees to share a potion of built area with the developer, even according to a JDA model. In this case, the landowner never intends to give up his share of the built-up area.
So, in such a situation, if TDR is taxable? The author considers that TDR should not be taxable in such cases, as it has never been with the intention of doing business or as part of the promotion of a transaction by the owner. The conditions of Section 7 are therefore not fully met and therefore there should be no supply. In addition, there will never be a commercial motive or profit in such transactions. However, it can also be argued that the definition of “business” as defined in Section 2(17) is very broad and encompasses any trade, trade, manufacturing, occupation, vacation, adventure or other similar activity, whether it is a financial benefit, regardless of the magnitude, frequency, continuity or regularity of that activity or transaction. Therefore, the activity of transfer of development rights by a landowner, individual or not, is a service subject to the GST. As part of the joint development agreement, the landowner simply entered into an agreement with the developer/promoter for the development of the construction on the land in question. The landowner transfers the right to build the building to the project proponent. The joint development contract is not an agreement for the sale of land by the owner to the developer. The transfer of the right to land use is a service for the developer and taxable under the GST plan, with a few exceptions. The landowner transfers or authorizes the right of the land to carry out the construction of the project by the developer against the consideration in the form of a free housing or housing allowance with monetary benefits. as registered persons, in the case of which the main tax on the provision of these services, (a) and development rights in the form of development rights covered in point (b), occurs on the date on which the developer, contractor, contractor, contractor or other registered person, if any, transfers the property or law into the complex, building or civil structure built to the person who provides the development rights by concluding a deed of transport or similar instrument (e.g. B the letter of attribution).
The detailed analysis of the input tax credit is available in the article “The Real Estate and Common Development Agreement after GST” in Taxguru.in.