One 'A' is giving loan to a land owner 'B'. In turn 'B' executes a Power of Attorney to one 'C' who is an employee of 'A'. 'C' develops the land as plots, builds roads etc., with the finance from 'A'. 'C' starts selling the plots to various people in various dates. Technically the money goes to 'B' and returns back the same to 'A' towards loan he received from them.
My questions are:
1. Will this transaction fall under Binami Trans ACT?
2. The position of 'C' under GST. Is he liable to GST ? if so on which value?
Loan, Power of Attorney, and GST: Land Development Deal Not Benami; GST Applies to Builder's Services A person 'A' provides a loan to landowner 'B,' who then grants a Power of Attorney to 'C,' an employee of 'A.' 'C' develops the land using 'A's' funds and sells plots, with proceeds technically going to 'B' and then back to 'A' as loan repayment. The questions raised were whether this constitutes a benami transaction and the GST liability of 'C.' The response clarified that it is not a benami transaction and confirmed that GST applies based on the services provided by 'C' as the builder. (AI Summary)
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