Introduction:
Development agreements are popular not only with respect to the construction of residential or commercial complexes but also with respect to laying and development of plots. The real estate companies enter into agreements with landowners for the purpose of laying of plots and undertaking various development works viz. compound wall, approach roads, parks, plantation, street lighting, drainage/sewerage facilities etc. In consideration for undertaking these activities, the developer is generally entitled to a portion of the developed plots. The landowner is entitled to sell the remaining portion of the developed plots. Let us understand the GST[1]implications in connection with these arrangements. Typically, every joint development agreement gives raise to four transactions for which the tax impact has to be understood:
Read more: GST Implications on Developemnt of Plots - Dec 2020