Joint development agreements and VAT: tax applies only to the goods component, not the landowner's share in land.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....A joint development agreement does not, by itself, create a taxable works contract for the landowner's share: VAT can arise only from the developer's construction obligations once agreements with flat purchasers are executed for monetary consideration. An exchange of an undivided share in land for a corresponding built-up share is barter, not sale, because no price moves from the landowner to the developer. Entry 54 of List II permits tax only on the goods element in a works contract, so levy on land or immovable property is outside legislative competence. A circular cannot supply a missing statutory machinery for valuation, and the composition scheme cannot enlarge taxability to non-taxable land value.....