Page 146 - GSTL_26th March 2020_Vol 34_Part 4

656 GST LAW TIMES [ Vol. 34
ment, on the recommendations of the Council, hereby notifies the following
classes of registered persons, namely :- (a) 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) regis-
tered 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 per-
sons in whose case the liability to pay central tax on supply of the said ser-
vices, on the consideration received in the form of construction service re-
ferred 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, build-
ing or civil structure, to the person supplying the development rights by en-
tering into a conveyance deed or similar instrument (for example allotment
letter).
5.4 Further, in Notification No. 13/2017-C.T. (Rate) as amended by No-
tification No. 5/2019-C.T. (Rate), dated 29-3-2019, Service by way of transfer of
development rights/Additional FSI by any person to promoter were made taxa-
ble under reverse charge mechanism.
A reading of all above-mentioned Notifications along with the FAQ,
show that transactions of transfer of development rights/Additional FSI are tax-
able under GST Laws @ 18% (9% CGST + 9% SGST) under Sl. No. 16, item (iii) of
Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 (Heading 9972).
6. In view of the extensive deliberations as held hereinabove, we pass
an order as follows :
ORDER
7. For reasons as discussed in the body of the order, the questions are
answered thus -
Question A :- Whether GST is leviable on sale of Transferable Devel-
opment Rights (‘TDR’)/Floor Space Index (‘FSI’) received
as consideration for surrendering the joint rights in land
in terms of Development Control Regulations and grant-
ed 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?
Answer :- Answered in the affirmative.
Question B :- If yes, what will be classification under GST and what
will be applicable rate of GST?
Answer :- GST classification will be under Heading 9972 and the applica-
ble rate of GST is 18% (9% CGST + 9% SGST).

_______

GST LAW TIMES  26th March 2020  242