In the case of MAARQ Spaces (P.) Ltd., 2019 (11) TMI 994 – AUTHORITY FOR ADVANCE RULING, KARNATAKA Applicant has entered into a joint development agreement with landowners for the development of residential complex land and development costs is borne by the applicant. Revenues from the sale of land are shared in a ratio of 75 per cent for landowners and 25 per cent for applicants. It was found that the applicant`s activities correspond to the total amount of service to landowners and the taxable value of the Rule 31 delivery (with appropriate means consistent with the principles and general provisions of Section 15). The AAR pointed out that the taxpayer`s primary jurisdiction in the transformation of raw land into a well-developed residential complex and not in the sale of land. Activities include measuring the land, establishing a detailed map of the proposed layout, evacuating/levelling the land, constructing roads, designing and creating common equipment, etc. The land sales activity is incidental to the main activity of the development of the land. In addition, several provisions of the agreement indicate that the taxpayer is not entitled to the property and is therefore not involved in the sale of land in accordance with Annex III of the CGST Act. With respect to valuation, Rule 31 of the CGST rule applies and the value of the delivery is 25% of the market value of each building received by the subject. Plan a 30-minute call with the highest-rated accountant. It`s fast, simple and confidential! (Article above was written on December 5, 2019 and written jointly by CA. Yogesh Ingale, CA. Tushar Ajmera and CMA.
Anuj Chordiya. The opinions expressed are strictly personal. For all questions and feedback, contact us at email@example.com) Now, if we read the opening paragraph of this communication, it is found that the request was granted in the exercise of powers that were transferred to different sections, including Section 5 of Section 15 of the CGST Act. It appears, therefore, that the communication in question is issued under the authority of the law. The same was true of IN RE: SHRI SANJEEV SHARMA 2018 (4) TMI 1077 – AUTHORITY FOR ADVANCE RULING , NEW DELHI, the Ld. Authority concluded in Para-26 that this notification had been issued pursuant to Section 15 (5) of the CGST Act in 2017 by the government on the recommendation of the GST Council and that there was therefore no need for a separate rule. As a result, Article 2 of Communication 11/2017 – Central Tax (rate) of 28.06.2017 by Section 15(5) of the CGST Act is fully authorized in 2017 to issue provisions relating to machines for determining the value of surfaces for exclusion and for measuring the value of the supply of goods and services to the collection of GST. The tax impact on the first part of the transaction, i.e. the transfer of development rights, is as follows: In the real estate sector, it is a common practice for landowners and developers to come together and develop a property together. It helps developers facilitate the need for land acquisition financing, as well as share the economic risks and rewards of the project with the landowner.
The Joint Development Agreement (JDA) is structured in different ways to meet the needs of the parties and the most structured are the agreement on revenue distribution, the sharing of turnover or the combination of the two, coupled with a pre-deposit. Get tax responses from first-class CAs. It`s fast, simple and anonymous! In this case, the taxpayer and the landowner completed a JDA for the development of land in residential land as well as amenities. The distribution of income between the taxpayer and the landowner is 25% and 75% respectively. The cost of development has been borne by the taxpayer. The taxpayer also entered into an agreement with customers for the sale of land built for compensation.