Joint Development Agreement of Land

[Guest]

GST and Capital gain Tax in Joint Dev.Agreement on the share of land owner

I had 1500 SQM land,did JDA 2013 with builder in 35% and 65%.The guideline value of land in 2001-02 was 1200/- per SQM.Now the duplexes are ready for possession of my 35% share i.e.the 3 duplex (constructed area of 108.82,120.7,110.5=340.02 SQM)in lue of the whole land.The guideline value are land=22000/- per SQM and RCC roof house is 32000/-per SQM.Can any body tell me :1.How much GST to be given to builder by me (Land owner)

2.How much capital gain Tax is to be paid to IT Deptt

The fact is that I am not going to sell any duplex and will use 2 units for our residence and 1 unit had to gift to my close near relative.

[Rajagopalan Ranganathan]

Sir,

As per rule 27 (a) of CGST Rules, 2017 "where the supply of goods or services is for a consideration not wholly in money, the value of the supply shall be the open market value of such supply." In your case since the supply of 3 duplex is in lieu of the land provided by you, you have to pay gst on the open market value of such duplex. Actually the gst is to be charged by the developer and he has to deposit the same to the Government.

Regarding payment of capital gain tax I am not competent to advise you. Some other expert in this forum will do so or consult your auditor.

AI Summary

Open market valuation for GST applies to in-kind consideration; developer must charge and remit the tax. Supply of property received in exchange for land under a joint development agreement attracts GST computed on the open market value of the property under rule 27(a) of the CGST Rules, 2017; the developer must charge GST on that open market value and remit it to the government. Capital gains tax implications are not addressed and require consultation with a tax expert or auditor.