Joint Development Agreement

[Bhavesh Patel]

Land owner entered into Joint Development Agreement(JDA) on 28/06/2016 with developer of residential plot. As per agreement payment is made to land owner once the full consideration received from customer. Full sales consideration received from customer on 08/02/2019 and then the developer pay to land owner as per JDA. Is GST applicable to land owner @ 18% on amount paid by developer to land owner.

AI Summary

GST at 18% Applies to Landowner Payments in Joint Development Agreement Per Notification No. 4/2018-Central Tax (Rate). A landowner entered into a Joint Development Agreement with a developer for a residential plot. According to the agreement, the landowner receives payment once the full sales consideration is received from the customer. This occurred on February 8, 2019. A query was raised about the applicability of GST on the amount paid by the developer to the landowner. The response, referencing Notification No. 4/2018-Central Tax (Rate) dated January 25, 2018, confirmed that GST at 18% is applicable on the payment made to the landowner.