Realtors move to Bombay HC against new notification
Some builders have dragged the GST Council, central and Maharashtra governments, to court for including such transactions under the GST framework.
Real estate developers have filed a writ petition in the Bombay High Court challenging a recent notification that made the transfer of development rights from the land owner to the developer taxable.
Joint development agreements or JDAs are a common feature in the real estate sector wherein the land owner transfers the land to the real estate developer and gets apartments, a certain amount of revenue or a combination of both in return. As per a January notification, GST was payable by both land owner and the developer.Industry trackers say such transactions were exempt under the previous tax regime.
The government claims that in most cases landowners get apartments in the real estate project after completion and that is nothing but consideration for the transfer of land rights. GST therefore is applicable on that.