Liability to pay Central GST by transferor of development rights at the time of transfer or possession-Special Procedure Notification
The Central Government, on the recommendations of the GST Council has notified the two classes of registered persons to cover both who supply development rights in consideration of construction services and those who supply construction services in consideration of development rights.
A typical example of the registered persons covered are the parties in a Joint Development Agreement whereby the builder gets the development right and the owner gets the consideration in the form of share on the building.
The classes notified are as under:
(a) The first one being the registered persons who supply development rights to a developer, builder, construction company or any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure; and
(b) the second one being the registered persons who supply construction service of complex, building or civil structure to supplier of development rights against consideration, wholly or partly, in the form of transfer of development rights.
as the registered persons in whose case the liability to pay central tax on supply of the said services, on the consideration received in the form of construction service referred to in clause (a) above and in the form of development rights referred to in clause (b) above, shall arise at the time when the said developer, builder, construction company or any other registered person, as the case may be, transfers possession or the right in the constructed complex, building or civil structure, to the person supplying the development rights similar instrument (for example allotment letter).
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When it is notified?
Pls download the notification from the post