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GST applicability on JDA related land development from agricultural land to plotted residential land

Network (Self Employed) (49 Points)

21 August 2022

Is GST applicable on JDA related to land development from agricultural land to plotted residential land ?

Scope of the JDA is to convert agricultural land into residential and commercial plots ( after acquiring necessary permissions from municipal authorities, lay roads and plot the same.)_.Then the plotted land is divided between developer and landlords as per agreed shares in the JDA.

If GST is applicable then who is liable to pay ? Is it the developer or landlord or both ?

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4 Replies

Sai Allu (754 Points)
Replied 21 August 2022

GST Applicability on Joint Development Agreement (JDA)
If the landowner gives his land to the developer and after a while in return gets a constructed property, then in such a case the landowner will be liable to pay GST on landowners share. And GST on flats given to landowner, the GST rate on such transfer is 18%.

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Network (Self Employed) (49 Points)
Replied 21 August 2022

In the above case there is no construction. The developer will get necessary permissions from municipal authorities and convert the agricultural land tnto residential and commercial plots with property roads etc. Is the GST applicable ?

Sai Allu (754 Points)
Replied 21 August 2022

Under GST, a single rate of 12% is applicable on under-construction properties, whereas no GST is applicable on completed properties

Adv. Ravish Bhatt, ADIT, CIOT (Dual Qualified Lawyer/ Solicitor International Tax Affiliate CIOT) (1110 Points)
Replied 23 August 2022

JDA and post JDA transactions will primarily involve:-

Transfer of rights by owner to builder for development of land
Supply of services by builder to owner in terms of development or construction services.
Sale of land ultimately developed by owner/ builder

There are specific circulars dealing with Joint Development Agreement for construction under JDA. Check up if they also apply to JDA for development and plotting of land. I believe they should.