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.

[CASeetharaman KC]

Please refer to Notification No. 4/2018-Central Tax (Rate) dated 25-01-2018in this respect. GST @ 18% would be applicable on the amount paid by developer to Land Owner

AI Summary

GST applicability on joint development payments: developer payments to landowners attract tax under relevant notification. Payments made by a developer to a landowner under a Joint Development Agreement, where the landowner's compensation is paid after the developer collects full sale consideration from buyers, are taxable under the goods and services tax framework and attract the rate specified in Notification No. 4/2018 Central Tax (Rate) dated 25 01 2018 on the amounts paid by the developer to the landowner.