22. September 2021 · Comments Off on Gst In Case Of Joint Development Agreement · Categories: Uncategorized

– in the case of the JDA, the GST applies to both landowners and developers. For the client, this is a service under a contract of enterprise provided according to the GST and it would require GST@18% of the construction costs of the landowner. In this case, the “right to development” of land is an advantage de resulting from land and, therefore, will fall directly within the definition of “land”. Since the same right is granted irrevocably and permanently, it falls within the definition of “sale of land”. The same is covered in Entry 5 of Schedule III of the Central Goods and Service Tax Act, 2017, and should therefore not be considered a sale of goods or a service. In the previous update, we applied with the ability to control joint development agreements under the GST regime. With this update, we would like to list the provisions relating to the delivery date and the evaluation of the service with regard to joint development contracts. Therefore, it can be considered that the developer is required to pay the GST for the apartments that the owner of the land has already granted before the start of construction, which will prove to be a great harshness for the developers. Point 15 of the 2017 CGST Law, in conjunction with Rule 27 to 35 of the 2017 CGST Rules, is now the evaluation element. It should be noted that there is no explicit provision for the valuation of housing granted to landowners under a joint development agreement. Therefore, the most appropriate rule must be applied. Rule 27 of the 2017 CGST Rules provides that if the value of the delivery of goods or services in exchange for consideration is not entirely in cash, the value of the delivery is the open market value of that delivery.

If the value of the open market is not available, it is determined as a total consideration in cash or equivalent….

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