GST on Joint Venture

[Padmanathan KV]

ABC LLP which is holding 300 Cents of land is entering into a Joint Venture with XYZ LLP which is a developer for letting out commercial property. XYZ LLP shall build a commercial complex in the land belonging to ABC LLP and the registered JV will let out the building for rent charging 18% GST from tenant. The rent received by the registered LLP shall be shared between ABC LLP and XYZ LLP in 1:2 ratio. NB: Land will remain asset of ABC LLP and building will remain asset of XYZ LLP in books of accounts.

Whether 1/3 and 2/3 rent shared between ABC LLP and XYZ LLP liable to GST? If so, would reg JV entitled to claim ITC?

AI Summary

ABC and XYZ LLP's joint venture faces GST questions on shared rent and ITC claims; explore GST Act amendments. ABC LLP and XYZ LLP have formed a joint venture to develop and rent out a commercial property, with ABC providing the land and XYZ constructing the building. The rental income will be divided between the two in a 1:2 ratio, with 18% GST charged to tenants. Questions arose about whether the shared rent is subject to GST and if the joint venture can claim Input Tax Credit (ITC). Responses suggest examining the GST Act amendments and the terms of the agreement, as these factors influence tax liability. One opinion considers the rent an actionable claim, potentially exempt from GST.