Is the development and sale of land by the complainant taxable under the GST? Submitted in an invoice to the AAR according to GST, Karnataka of IN RE: M/S. MAARQ SPACES PRIVATE LIMITED reports in 2019 (11) TMI 994 – AUTHORITY FOR ADVANCE RULING, KARNATAKA- The applicant submitted that he entered into a joint development agreement on 8-11-2017 with landowners for the development of residential land, with specifications and amenities. The consideration was agreed on the basis of the distribution of revenue in the 75% quota for landowners and policyholders and 25% for applicants. The applicant is responsible for the development costs. This tax is payable at 25% of the market value of the land. The main cause of accounting is only in the books of the owner and developers. Let`s talk one by one. B. Completion phase of the project reaches an appropriate level of development More than so passed, the FM speech shows that “149. The Joint Development Agreement, signed for the development of real estate, is responsible for paying capital gains tax in the year the project is completed. Advantage for landowners: landowners with little technical knowledge of real estate development can now benefit from a higher consideration when selling developed land than a simple sale of land.
The notice states that it must indicate revenues in the 2006-07 GJ, as the date of the transfer should be the date of the agreement with the contractor. Because there was no development activity on the ground at the time, which is the subject of a development agreement – the construction process has not even been initiated and there is no authorization for the construction of the building – Thus, the issue of the sale in the form of open land has not been received – The mere fact of receiving the refundable guarantee cannot be considered a consideration – The AO has calculated the capital gain on the whole land, although the auditor has retained 38%. A new section 194 – IC is introduced to provide that if a monetary policy counterparty is to be paid under the established agreement, the 10% tax is deductible from that payment. The two sides meet with the common intention of opening up the land and sharing the proceeds for the sale of the land on the land. However, the landowners give the developer the rights to use the developer, which is why the developer provides the land development service to the landowners. While the joint development contract is concluded for both parties to share the benefits of the sale of land to customers, there is a clear supply of a service from the developer to the landowner when landscaping the land owned by the landowner. That is why we are convinced that soil development is a service of the complainant. The transaction is carried out in net redemption terms only if the activity is exclusively the transfer of ownership or the transfer of ownership of real land. If the land sale transaction is related to another activity such as infrastructure work, this exclusion does not apply. Therefore, the content of the agreement between the parties is important. It is clear that the transaction between the landowner and the complainant`s developer is not a sale of land, but an obligation to develop the land and provide infrastructure/equipment.
There is an element of service provided by the applicant in the form of a land development project, which is the dominant activity of the agreement.