The Advance Ruling Authority (AAR), Karnataka has held that the landowner is liable to pay GST on premises allotted to him, which he intends to distribute among his family members.
The applicant had entered into an agreement with a Developer to develop his land as per which, he had contributed only his land and in return gets his share of 50% of the total 12 flats constructed and also 50% share out of 4000 sq. ft. of commercial construction. The Joint Development Agreement was signed by him in January 2016 and construction is reported to be completed in January 2018. The applicant approached the AAR seeking a clarification on the tax liability.
The applicant entered into an agreement with builder & developer to develop his land out of which, for his contribution of land, he gets a share of 50% of total 12 flats constructed and also 50% share out of 4000 sq.ft. of commercial construction which he intends to distribute among his family members, applicant being person who has supplied development rights to a developer in respect of his land, is liable to registration u/s 22 and payment of tax.
The authority noted that as per Section 25 of the CGST Act, 2017, “Every person who is liable to be registered under Section 22 or Section 24 of the MST Act 2017 shall apply for registration in every such state or Union territory in which he is so liable within thirty days from the date on which he comes liable to registration.
The authority observed that the applicant has not furnished any information with regard to transfer of possession of the constructed flats 7 commercial area or allotment order of the same, in the instant application and hence the authority presumes that the possession of the constructed flats / commercial area has not been handed over to the Applicant, as on date.
“Therefore, we are of the considered opinion that the Applicant is a supplier of a taxable service by way of transfer of an undivided share of land and hence is liable to register himself and discharge the tax accordingly,” the authority said.
Subscribe Taxscan Premium to view the Judgment
