Notification No. 22/2019 - Integrated Tax (Rate) Explained

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Notification No. 22/2019 - Integrated Tax (Rate): Seeks to amend notification No. 04/2018 - Integrated Tax (Rate), dated the 25th January, 2018, by adding an explanation on the applicability of provisions related to supply of development rights.

GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R (E).- In exercise of the powers conferred by section 20 of Integrated Goods and Services Tax Act, 2017 (13 of 2017) read with section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.4/2018- Integrated Tax (Rate), dated the 25^th January, 2018 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 72(E), dated the 25^th January, 2018, namely:-

After paragraph, the following explanation shall be inserted, namely: -

“Explanation- Nothing contained in this notification shall apply with respect to the development rights supplied on or after 1^st April, 2019.”.

2. This notification shall come into force with effect from the 1^st day of October, 2019.

(Ruchi Bisht)
Under Secretary to the
Government of India

Note: -The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 4/2018 - Integrated Tax (Rate), dated the 25^th January, 2018, vide number G.S.R. 72 (E), dated the 25^th January, 2018.

📚 Frequently Asked Questions (FAQs): Notification No. 22/2019 - Integrated Tax (Rate)

Q1: What is Notification No. 22/2019 – Integrated Tax (Rate)?

Answer:
It amends Notification No. 4/2018 – Integrated Tax (Rate) by clarifying that development rights supplied on or after 01-04-2019 are excluded from exemption, even if the agreement was signed earlier.

Q2: What are “development rights” under GST?

Answer:
Development rights mean the right given by a landowner to a builder/developer to construct and sell property on the land, usually in exchange for a share in constructed area or revenue.

Q3: From which date does this amendment apply?

Answer:
The notification is effective from 1 October 2019, but it restricts exemption retrospectively for development rights supplied on or after 1 April 2019 notfctn-22-2019-igst-rate-engli….

Q4: Does this notification impose GST on development rights?

Answer:
Indirectly, yes. It removes exemption, making development rights taxable under applicable GST provisions, usually under reverse charge mechanism (RCM).

Q5: Which legal sections empower this notification?

Answer:
Section 20 of IGST Act, 2017
Read with Section 148 of CGST Act, 2017
These sections allow the Government to notify special procedures or clarifications.

Q6: Will agreements signed before April 2019 be affected?

Answer:
Yes, if development rights are supplied (transferred) after 1 April 2019, GST implications apply irrespective of agreement date.

Q7: Real-life example for better understanding?

Answer:
🧱 Example:
A landowner signed a Joint Development Agreement in 2018, but rights were transferred in May 2019.
➡️ GST applies, since understood supply happened after 1 April 2019.

Q8: Is GST payable under forward charge or reverse charge?

Answer:
In most real estate cases, GST is payable under Reverse Charge Mechanism (RCM) by the developer, subject to notifications like 07/2019 and 08/2019.
👉 Ensure correct reporting via Finodha GST Return Filing
🔗 https://finodha.in/gst-return-filing/

Q9: Does this affect affordable housing projects?

Answer:
Yes. Even affordable housing developers must follow this clarification while calculating GST liability on development rights.

Q10: Is ITC available on GST paid on development rights?

Answer:
Generally, ITC is restricted for residential real estate projects under new tax regimes. Expert evaluation is strongly recommended.
👉 Talk to Finodha GST experts
🔗 https://finodha.in/gst-compliance/

Q11: Do landowners need GST registration due to this notification?

Answer:
Usually developers pay GST under RCM, so landowners may not need registration, but each case must be evaluated carefully.
👉 Check eligibility with Finodha GST Registration
🔗 https://finodha.in/online-gst-registration/

Q12: How does this impact GST returns?

Answer:
Developers must:
Declare RCM liability correctly
Pay tax in GSTR-3B
Maintain proper documentation
👉 Start compliant filing with Finodha
🔗 https://finodha.in/gst-return-filing/

Q13: What happens if GST is not paid?

Answer:
Non-compliance may attract:
Interest under Section 50
Penalty under Section 122
Litigation risk 🚨

Q14: Does this apply to IGST or CGST + SGST?

Answer:
This notification applies specifically to Integrated Tax (IGST), mainly for inter-state transactions.

Q15: How can Finodha help?

Answer:
Finodha assists with:
Real estate GST structuring
RCM compliance
GST return filing
Advisory on development rights taxation
👉 Get expert support now
🔗 https://finodha.in/gst-compliance/

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