GST on flats allotted to Landowner-Promoter & on development rights in case of Joint Development Agreement is illegal (Part-I)
Deepak Bapat
Where a landlord sells the land to a developer, there is no role for him in a real estate project. GST on the sale of land is not payable by virtue of Para 5 of Schedule III appended to Central and State GST Act, which provides that a transaction of sale of land shall be treated neither as a supply of goods nor a supply of services.
The case is different, where the landlord does not want to sale land but want to develop the said land, jointly with a developer by entering into Joint Development Agreement (JDA) on revenue sharing basis or area sharing basis or something in cash plus mixture of revenue & area sharing. JDA can be for:
construction on vacant land;
development of land into plots or apartment.
demolition of existing building and constructing new building on the same land, or
converting existing building or a part thereof into apartments,
JDA is required to be drafte.......