By Accommodation Times Bureau
The recent notification on GST has made the Real Estate Developers to move towards court against it. With the Bombay High Court (BHC) the developer have filed a writ petition for challenging the notification by the government on transferring rights of landowners to developers is taxable.
According to the said notification, When a developer enters into a development agreement with a Landowner, GST would become payable by the Landowner when the developer transfers possession or the rights in the constructed complex, building or civil structure, to the Landowner by entering into a conveyance deed or allotment letter.
Ithe issued notification says that both the developer and landlord would be payable of GST.
The Joint Development Agreements is an agreement between a landowner and a real estate developer to construct new projects is called a Joint Development Agreement. Where the developer constructs homes and the landowner provides land for it.
The developers pulled GST Council, Union of India, Maharashtra government into the court regarding the matter and Bombay High Court issued notices to them and fixed the next date of hearing on July 9.
According to the official from the legal firm said that the notification excludes the sale of land and building from its ambit which goes against the framework. It is also said in previous tax regime such transaction was exempted, a source said.
According to one of the developers who did not wish to be named he said, It’s difficult to decide payment with the landowners due to the levy of GST for acquiring of land.
From the outright land deals, it’s changing to Joint Development Agreement, which brings legal frame between the landlord and Developer.