GST APPLICABILITY REGARDING JOINT DEVELOPMENT AGREEMENT
This query is : Resolved
26 October 2019
Dear Sir/madam,
Myself, a builder and a land owner enters into a JDA in purview of construction of a gated community (Individual villas). There is no consideration from the part of builder to Land owner. The Land owner receives only the value of the land as his portion of share, that too direct from villa buyer.
1. Is this JDA valid
2. If so, Then what is the % of GST applicable for selling of villas ((i.e.,) 18% or 12%)
3. if 12% is applicable then how much value has to be entered in GST return. whether the sale value should include land value also. If land value to be included then how it has to be accounted because the value for land portion is directly paid to the land owner.
Kindly enlighten me on this.
Thanks in advance.
Myself, a builder and a land owner enters into a JDA in purview of construction of a gated community (Individual villas). There is no consideration from the part of builder to Land owner. The Land owner receives only the value of the land as his portion of share, that too direct from villa buyer.
1. Is this JDA valid
2. If so, Then what is the % of GST applicable for selling of villas ((i.e.,) 18% or 12%)
3. if 12% is applicable then how much value has to be entered in GST return. whether the sale value should include land value also. If land value to be included then how it has to be accounted because the value for land portion is directly paid to the land owner.
Kindly enlighten me on this.
Thanks in advance.
CA R SEETHARAMAN
(Expert)
28 October 2019
1 Valid.
2 18% GST applicable on construction cost excluding land.
3 Exclude land value.
2 18% GST applicable on construction cost excluding land.
3 Exclude land value.
Soumitra Basu
(Expert)
29 October 2019
THE JDA SHOULD BE REGISTERED. YOU HAVE TO PAY GST ON REVERSE CHARGE BASIS ON THE VALUE OF BUILDING TO BE HANDED OVER TO THE LANDOWNER.
CA R SEETHARAMAN
(Expert)
29 October 2019
No building is handled over to the landlord.
Soumitra Basu
(Expert)
30 October 2019
yes you are currect. there is no question of reverse charge.
30 October 2019
Dear Sirs,
Thank you very much for your valuable feedbacks.
A follow up uestion:
Why cant we opt for 12% gst with the land value because there is a JDA in place. As my land value is much lesser than my construction cost, 12% on the land value will be much beneficial.
Thank you very much for your valuable feedbacks.
A follow up uestion:
Why cant we opt for 12% gst with the land value because there is a JDA in place. As my land value is much lesser than my construction cost, 12% on the land value will be much beneficial.
26 July 2024
The 12% GST rate with the presumed land value benefit may not always be feasible due to the requirement that 1/3rd of the total sale value must be considered as land and 2/3rd as construction. If the actual land value is much lower than 1/3rd of the sale value, the 12% GST may not be favorable.
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