GCC in the last 8 years through Joint Development Agreements or JDAs has helped many middle-class landowners in transforming their asset and adding more returns to their investment. It is also a win-win situation for buyers as they have now opportunity to buy a apartment at prime locations. JDAs are a common feature in the real estate sector wherein the land-owner transfers the land to the real estate developer and gets flats, a certain amount of revenue or a combination of both in return. In JDA, the Developer enters into a Development Agreement with Landowner, whereby
- The developer acquires the development rights from land-owner with respect to the land.
- The development right entitles the developer to obtain various types of licenses and approvals from the government authorities and construct the complex, building or civil structure on the land.
- In return for the transfer of development rights by landowner, the developer hands over the ownership rights of certain percentage of the developed area i.e super structures and may also certain amount.
- The remaining flats retained by developer and sold to various buyers
GCC has transformed many properties in and around Chennai, Tamil Nadu under JDA plan and in the process were able to drive value across the demand-supply chain. We have a simple and transparent process of collaboration with landowners and ensure that landowners are taken into confidence before the engagement. Taxation is also another common point of contention between developer & landowner which lately are quite clear based on recent rulings which says that where merely land development activities are undertaken under a JDA, the same are likely to be taxed under GST. However, where development of land is naturally bundled with sale of land and sale is the principal supply in the bundled transaction, the transaction may be construed as composite supply not liable to GST. Thus, it would be relevant for the taxpayers to agree upon exact scope of services under a JDA to determine its taxability.