(b) registrants who provide complex component construction services, real estate or civil housing to the urbanization rights provider for payment, in whole or in part, in the form of a transfer of operating rights, an agreement between a landowner and a real estate developer for the construction of new projects is referred to as the Joint Development Agreement. In a common development of the capital, the owner carries out construction and legal work, while the owner of the land makes the land available. There are two types of JDA. They are worded as follows: the landowner grants development rights to the developer by signing the joint development contract. The developer, on the other hand, provides the landowner with a continuous supply of work for a period of time. In a similar case in Nforce Infrastructure Pvt. Ltd[20 G.S.T.L. 184], the Authority decided that the taxpayer would provide the development rights provider with construction services in the form of a transfer of development rights. Sometimes the landowner can have the construction built for his own use for the purposes of his residence and agrees to share a potion of built area with the developer, even according to a JDA model. In this case, the landowner never intends to give up his share of the built-up area. So, in such a situation, if TDR is taxable? The author considers that TDR should not be taxable in such cases, as it has never been with the intention of doing business or as part of the promotion of a transaction by the owner. The conditions of Section 7 are therefore not fully met and therefore there should be no supply. In addition, there will never be a commercial motive or profit in such transactions.
However, it can also be argued that the definition of “business” as defined in Section 2(17) is very broad and encompasses any trade, trade, manufacturing, occupation, vacation, adventure or other similar activity, whether it is a financial benefit, regardless of the magnitude, frequency, continuity or regularity of that activity or transaction. Therefore, the activity of transfer of development rights by a landowner, individual or not, is a service subject to the GST. 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 AAR pointed out that the taxpayer`s primary jurisdiction in the transformation of raw land into a well-developed residential complex and not in the sale of land. Activities include measuring the land, establishing a detailed map of the proposed layout, evacuating/levelling the land, constructing roads, designing and creating common equipment, etc. The land sales activity is incidental to the main activity of the development of the land.