GST ON JDA IN CASE OF PLOTTING RESIDENTIAL PROJECTS

[ROHIT GOEL]

Dear Sir,

Company A and Company B both own 2 acres land. Now Company A is signing JDA with Company B as per which Company B will carry out plotted development on entire 4 acres land and sell residential plots. My questions are as follows:

1. Is TDR granted for plotted development exempt since ultimate sale of developed plots to customer is exempt?

2. If not,are there 2 separate taxable supplies in this case i.e. one being granting TDR by landowner to promoter and second being development services provided by promoter to landowner. Or only one i.e. grant of TDR?

3. If yes, what is respective tax rates on both type of services?

4. Would the tax liabilities be different if it is a revenue sharing or a area sharing arrangement?

5. I understand that tax is to be paid in case of area sharing arrangement only at time of completion of project. What would be position in case of revenue sharing arrangement i.e. say the developer would be liable to transfer 20% of entire project sale to the landowner instead of giving developed plots?

AI Summary

GST Implications of Joint Development Agreement: Taxable Supplies, 18% Rate, and TDR Exemption Considerations in Residential Projects A discussion on the Goods and Services Tax (GST) implications of a Joint Development Agreement (JDA) between two companies for a residential plotting project. Company A and Company B, owning 2 acres each, are involved in a JDA where Company B develops and sells the plots. Questions raised include whether Transfer of Development Rights (TDR) is exempt, the nature of taxable supplies, applicable tax rates, and differences in tax liabilities between revenue and area sharing arrangements. Responses suggest seeking professional advice, with brief answers indicating two taxable supplies, an 18% tax rate, and the need for further analysis on specific scenarios.