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GST on sale of TDR / FSI.

Levy of GST Seeking an advance ruling in respect of the following questions.

Whether GST is leviable on sale of Transferable Development Rights (‘TDR’)/ Floor Space Index (‘FSI’) received as consideration for surrendering the joint rights in land in terms of Development Control Regulations and granted in light of the article of agreement dated 18 December 2017 entered between the Applicant and Pune Municipal Corporation (‘PMC’) read with Development Control Regulations?

If yes, what will be classification under GST and what will be applicable rate of GST?

The basic issue before us is, whether GST is leviable on sale of TDR/ FSI received as consideration for surrendering the joint rights in land in terms of Development Control Regulations.

GST is payable at the rate of 18% (9% + 9%) on transfer of development rights or FSI (including additional FSI), under Sl. No. 16, item (iii) of Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017 (Heading 9972).

Further, in Notification No. 13/2017-C.T. (Rate) as amended by Notification no 5/2019-C.T. (Rate) dated 29.03.2019, Service by way of transfer of development rights/ Additional FSI by any person to promoter were made taxable under reverse charge mechanism.

A reading of all abovementioned Notifications along with the FAQ, show that transactions of transfer of development rights/AdditionaI FSI are taxable under GST Laws @ 18% (9% CGST+ 9% SGST) under Sl. No. 16, item (iii) of Notification No. 11/2017 - C.T. (Rate) dated 28.06.2017 (Heading 9972). — Vilas Chandanmal Gandhi, In Re… [2020] 20 TAXLOK.COM 089 (AAR-Maharashtra)

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