But the Ld. AAR did not discuss or press the meaning of the word “prescribed” anywhere in the judgment. Without discussing this provision, the logic explained by the AAR seems perverse. If it had been looked at there, it would certainly have been an interesting scenario. 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). But under the JDA agreement, there is a transaction to transfer the right of operation from the owner of the land to the owner. It is therefore important to know first whether or not the GST is responsible for the JDA.
The main point is that the transfer of development rights is similar to the sale of real estate and therefore falls under the jurisdiction of the GST. Section 50C being a legal fiction, its scope and scope are limited to what is stated in the provision. Therefore, this provision can only be invoked if land or buildings or both are transferred. Their establishment may not be extended to other evaluators, nor to other characteristics, nor to circumstances other than those indicated. It was also decided that Section 50C can be invoked when development rights are transferred at the same time as the transfer of the land. We can see that there is a recorded act of transmission. The additional fees would make no difference. As long as the condition is defined in section 50C.c is to say that the deed of sale of the property is registered; Other events or transfers or additional rights or liabilities would be Arif Akhatar Hussain v. ITO [2010 (12) TMI 91 – ITAT, MUMBAI] 2.8 Initially on the date of the agreement, the applicant did not charge GST and subsequently the applicant raised the invoice on VDPL and asked him to pay the GST on the transaction in question. VDPL informed the applicant, however, that this GST could not be applied to the sale of additional TDR/FSI.
On the basis of the above cases, it can be said that if only rural development activities are carried out within the framework of a joint economic and development committee, it is likely that this will also be taxed under the GST. However, if the development of the land is naturally grouped with the sale of land and the sale is the main delivery of the group transaction, the transaction can be interpreted as a compound delivery without GST liability. It would therefore be appropriate for taxpayers to agree on the exact extent of services provided under a JDA in order to determine their tax capacity. The development of land and, subsequently, the sale of these lands should not be taxable, because if the land is not in itself within the jurisdiction of the GST (according to SCH-III or the delivery of goods or services), how can it be a matter of taxation of property? When the land is sold, they have all the characteristics of the land.