Notification No. 23/2019 - Union Territory Tax (Rate) Update

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Notification No. 23/2019 - Union Territory Tax (Rate): Seeks to amend notification No. 04/2018 - Union Territory 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 21 of Union Territory Goods and Services Tax Act, 2017 (14 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- Union Territory 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. 78(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 - Union Territory Tax (Rate), dated the 25^th January, 2018, vide number G.S.R. 78 (E), dated the 25^th January, 2018.

📚 Frequently Asked Questions (FAQs): Notification No. 23/2019 - Union Territory Tax (Rate)

Q1: What is Notification No. 23/2019 – Union Territory Tax (Rate)?

Answer:
It is a GST amendment that removes the applicability of Notification 04/2018 benefits for development rights supplied on or after 1 April 2019.

Q2: From when is this notification effective?

Answer:
It is effective from 1 October 2019, but applies to supplies made from 1 April 2019 onwards.

Q3: What are development rights in GST terms?

Answer:
Development rights mean permission given by a landowner to a builder to construct and sell property on their land, usually in exchange for flats or revenue share.

Q4: Does this apply in Union Territories only?

Answer:
Yes. This specifically applies under UTGST, but similar provisions exist under CGST/SGST for states.

Q5: Why did the government introduce this amendment?

Answer:
To:
remove confusion
standardize taxation
avoid misuse of earlier exemptions
align real estate GST structure

Q6: If my project started before April 2019, does this apply?

Answer:
No. Only supplies made after 1 April 2019 are covered. Old transactions remain under old rules.

Q7: What happens in Joint Development Agreements (JDA)?

Answer:
Builders receiving development rights under JDA must:
assess GST liability
pay tax as per current rate
disclose properly in returns
Finodha can help 👉 https://finodha.in/gst-return-filing/

Q8: Who is liable to pay GST – builder or landowner?

Answer:
Generally, the developer/builder becomes liable under reverse charge or forward charge depending on structure and agreements.

Q9: Is GST payable even if consideration is flats instead of money?

Answer:
Yes. GST applies even for barter transactions (flats given instead of cash). Value is calculated on market price.

Q10: Which law section gives power for this notification?

Answer:
It is issued under:
Section 21 of UTGST Act, 2017
Read with Section 148 of CGST Act, 2017

Q11: How should builders calculate GST value?

Answer:
They must use:
Open market value OR
Stamp duty value OR
Construction service value
Consult experts to avoid mistakes.

Q12: Do I need separate GST registration for a project in UT?

Answer:
Yes, if operating in Union Territory, separate registration may be required.
👉 Register easily: https://finodha.in/online-gst-registration/

Q13: What if I already claimed exemption wrongly?

Answer:
You may need:
Revised returns
Interest payment
Penalty adjustment
Better to consult GST experts immediately.

Q14: How should this be reported in GST returns?

Answer:
Report under:
Outward supplies
Construction services
Applicable tax rate
File accurately using Finodha 👉 https://finodha.in/gst-compliance/