GST on Sale of TDR/FSI- Received for Surrendering Joint Rights in Land

In India, TDR stands for Transferable Development Rights, and FSI stands for Floor Space Index. When a person surrenders joint rights in land, he or she receives TDR/FSI in return. The GST on the sale of TDR/FSI received for surrendering joint rights in land is a topic that has been widely discussed in recent times. In this article, we will discuss the various aspects of GST on the sale of TDR/FSI received for surrendering joint rights in land.

As per the GST law, any transfer of land or building, or rights in them, is considered a supply of goods or services. Therefore, any sale of TDR/FSI received for surrendering joint rights in land is also considered a supply of goods or services. As a result, GST is applicable on such transactions.

The rate of GST on the sale of TDR/FSI received for surrendering joint rights in land is 18%. This rate is applicable to both the buyer and the seller. Hence, if you are planning to buy or sell TDR/FSI received for surrendering joint rights in land, you need to consider this aspect.

One of the critical factors to consider in GST on the sale of TDR/FSI received for surrendering joint rights in land is the value of the transaction. As per the GST law, the value of the transaction includes both the TDR/FSI received and the consideration paid for the same. Hence, if the value of the transaction is more than Rs. 2.5 crores, the seller needs to pay GST under the reverse charge mechanism.

The reverse charge mechanism is a process where the buyer pays the GST on behalf of the seller. In the case of the sale of TDR/FSI received for surrendering joint rights in land, the buyer needs to pay the GST on behalf of the seller if the value of the transaction is more than Rs. 2.5 crores.

Apart from the above aspects, there are certain exemptions available under GST on the sale of TDR/FSI received for surrendering joint rights in land. For example, if the TDR/FSI is received for agricultural land, GST is not applicable on the transaction. Similarly, if the TDR/FSI is received by a government agency, local authority, or a statutory body, GST is also not applicable on the transaction.

In conclusion, the GST on the sale of TDR/FSI received for surrendering joint rights in land is a critical aspect that needs to be considered by both the buyer and the seller. The rate of GST on such transactions is 18%, and certain exemptions are also available. Therefore, it is essential to understand the various aspects of GST on the sale of TDR/FSI received for surrendering joint rights in land before entering into any transaction.