Under the GST, the concept of „supply” is very broad, including bartering or exchanging goods or services; The term „services” is defined as something other than goods. In addition, Appendix III of the CGST Act, 2017, excludes the sale of supplied land. There were some uncertainties about the fiscal capacity to transfer development rights under the Common Jid, whether or not they are subject to the GST. However, Communication 4/2018 specifies that the transfer of operating rights from the owner of the land to a real estate developer is taxable. In accordance with paragraph 1A, the value of the provision of development rights services by a person to the project proponent, for consideration in the form of residential or commercial housing, is considered to be equal to the value of similar dwellings charged by the developer by the independent purchasers closest to the date of transfer of these operating rights to the developer. The final tax obligation on operating fee transfer services for housing construction is less than the Tax calculated under Stage 1 and Stage 2. In the case of commercial housing, the final tax debt will be calculated at 18% on the value prescribed in paragraph 1A. JDA helps both the developer and the owner of the land with no initial investment for the basic allocation, partially avoiding stamp duty, the rapid development of the property as capital is only necessary for the execution of the construction work, the consideration for the owner will be paid most often after the completion of the project. In this case, the taxpayer and the landowner completed a JDA for the development of land in residential land as well as amenities. The distribution of income between the taxpayer and the landowner is 25% and 75% respectively.
The cost of development has been borne by the taxpayer. The taxpayer also entered into an agreement with customers for the sale of land built for compensation. The taxpayer sought a preliminary decision on whether, in the real estate sector, the tripartite model, known as the Joint Development Agreements, is often considered a model. Due to the high land prices, the possibility of such agreements has become normal in the sector. The value collected by the lessor on the delivery of TDR or open market value (perceived by the government during the collection of stamp duty) if such a TDR agreement has been entered into is charged. Part I: Development rights transfer service – tax rate, exemption, valuation, self-payment mechanism, delivery time (b) registered persons who provide complex, real estate or citizen structure services to the development rights provider for remuneration, in whole or in part in the form of a transfer of development rights, the service evaluation mechanism has two different effects in terms of transfer of development rights. After April 1, 2019, the real estate sector changed significantly in terms of the impact on GST. It is therefore important to rethink the law, to understand the effects of taxation and other aspects in order to a common development agreement.
Joint development agreements are generally concluded either on the basis of revenue distribution or on the basis of land distribution. In this article, we will take a walk through the provisions of the land-sharing agreement. If we consider the definition of the real estate project (in accordance with Section 2 (zn) of the RERA Act, it includes the development of land in the land. The other GST Act also recognizes this definition in the context of RERAs for the purposes of taxing real estate projects. This definition could therefore perhaps attract the attention of the authorities when it comes to taxing the sale of building land.