Joint Development Agreement

[Prasenjit Pal]

Sir, the query as posted yesterday needs to be revised and the corrected one is below

Joint Development Agreement(JDA) was executed between landowner and builder for construction of a residential building ( commercial area exceeds 15% of total capet area) on 31.08.2018. Since then neither construction was started nor commencement certificate was obtained till date. Even plan was also not sanctioned till date.

But an amount of ₹ 25 lacs has been paid to the owner by the builder on 31.08.2018 as a part of consideration (in addition to to the proposed share of flats). Even the flats have not been earmarked for this purpose as all the plans are not yet approved for commencement of project

Wheather any GST needs to be paid by virtue of that JDA executed 31.08.2018 and transfer of ₹ 25 Lacs from builder to developer and and if applicable wheather as per new scheme as applicable from 01.04.2019 or as per old scheme ?

AI Summary

GST Applicability on Joint Development Agreement Executed Pre-2019 with No Reverse Charge on Development Rights A Joint Development Agreement (JDA) was executed on 31.08.2018 between a landowner and a builder for constructing a residential building, with more than 15% of the area designated for commercial use. Despite a payment of 25 lakhs to the landowner, construction has not commenced, and plans are not approved. The query concerns the applicability of Goods and Services Tax (GST) on this transaction. The response indicates that since the JDA was executed before 01.04.2019, the old GST scheme applies, with no Reverse Charge Mechanism (RCM) on development rights. Tax liability arises at the time of allocation, and the new scheme may apply to the landowner's share.