This is with regard to circular No 4/2018 Central Taxes (Rate) dated 25/01/2018 where the Joint Development to be taxed. Pursuant to JDA Landowner will get constructed area from Builder for the agreed portion. My doubt is what is the value to be adopted for invoicing for the Builder to the Land Owner. As per the Guidance value Land value to be reduced as per the market value of the area to be transferred and rate of tax to be applied as per 2(119) of the GST Act, works contract services by SAC code 9954. The land owner has to pay tax amount to the Government, then only the Builder can avail the credit. Now the builder has to issue the tax invoice to the Landowner adopting the value indicating tax at 18%. This is my review. Any contrary to this view.

This is with regard to circular No 4/2018 Central Taxes (Rate) dated 25/01/2018 where the Joint Development to be taxed. Pursuant to JDA Landowner will get constructed area from Builder for the agreed portion.

My doubt is what is the value to be adopted for invoicing for the Builder to the Land Owner. As per the Guidance value Land value to be reduced as per the market value of the area to be transferred and rate of tax to be applied as per 2(119) of the GST Act, works contract services by SAC code 9954. The land owner has to pay tax amount to the Government, then only the Builder can avail the credit. Now the builder has to issue the tax invoice to the Landowner adopting the value indicating tax at 18%. This is my review. Any contrary to this view.

Reply—

As per FAQ (press release) published by CBIC dated 14.05.2019,

Question— How to determine value of construction services provided by the promoter to land owner in lieu of transfer of development rights, when land owner is not registered?

Answer— Value of construction services provided by the promoter to land owner in such cases shall be determined based on the total amount charged by the promoter for similar apartments in the project from independent buyers, other than the land owner, nearest to the date on which such development right etc. is transferred to the promoter, less the value of transfer of land, if any, as prescribed in paragraph 2 of Notification No. 11/2017-CT(R) dated 28.06.2017.tax is to be paid by the promoter on reverse charge basis.

Posted Date: Mar 05, 2020

This is with regard to circular No 4/2018 Central Taxes (Rate) dated 25/01/2018 where the Joint Development to be taxed. Pursuant to JDA Landowner will get constructed area from Builder for the agreed portion. My doubt is what is the value to be adopted for invoicing for the Builder to the Land Owner. As per the Guidance value Land value to be reduced as per the market value of the area to be transferred and rate of tax to be applied as per 2(119) of the GST Act, works contract services by SAC code 9954. The land owner has to pay tax amount to the Government, then only the Builder can avail the credit. Now the builder has to issue the tax invoice to the Landowner adopting the value indicating tax at 18%. This is my review. Any contrary to this view.

Reply—

As per FAQ (press release) published by CBIC dated 14.05.2019,

Question— How to determine value of construction services provided by the promoter to land owner in lieu of transfer of development rights, when land owner is not registered?

Posted Date: Mar 05, 2020