GST applicability on JDA related land development from agricultural land to plotted residential land

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Self Employed
53 Points Posted on 21 August 2022

Is GST applicable on JDA related to land development from agricultural land to plotted residential land ?  

Scope of the JDA is to convert agricultural land into residential and commercial plots ( after acquiring necessary permissions from municipal authorities, lay roads and plot the same.)_.Then the plotted land is divided between developer and landlords as per agreed shares in the JDA.

If GST is applicable then who is liable to pay  ? Is it the developer or landlord or both ?

 



 

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On 21 August 2022 at 18:52 Report
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Quick Summary
This discussion explores whether Goods and Services Tax (GST) applies to Joint Development Agreements (JDAs) where agricultural land is converted into residential and commercial plots. It questions who is liable for GST payments – the developer, the landowner, or both – and examines the tax implications, particularly noting that GST typically applies to under-construction properties but not completed ones.

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754 Points Posted on 21 August 2022
GST Applicability on Joint Development Agreement (JDA)
If the landowner gives his land to the developer and after a while in return gets a constructed property, then in such a case the landowner will be liable to pay GST on landowners share. And GST on flats given to landowner, the GST rate on such transfer is 18%.
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On 21 August 2022 at 19:03
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Self Employed
53 Points Posted on 21 August 2022

In the above case there is no construction. The developer will get necessary permissions from municipal authorities and convert the agricultural land tnto residential and commercial plots with property roads etc.   Is the GST applicable ?

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On 21 August 2022 at 19:05
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754 Points Posted on 21 August 2022
Under GST, a single rate of 12% is applicable on under-construction properties, whereas no GST is applicable on completed properties
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On 21 August 2022 at 22:29
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Dual Qualified Lawyer/ Solicitor Intern
1110 Points Posted on 23 August 2022

JDA and post JDA transactions will primarily involve:-

  1. Transfer of rights by owner to builder for development of land
  2. Supply of services by builder to owner in terms of development or construction services.
  3. Sale of land ultimately developed by owner/ builder

 

There are specific circulars dealing with Joint Development Agreement for construction under JDA.  Check up if they also apply to JDA for development and plotting of land. I believe they should. 

 

 

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On 23 August 2022 at 16:21

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