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AAAR upheld order of AAR that developing land of land-owners by developer as per JDA is supply of service

May 19, 2020[2020] 116 702 (AAAR-KARNATAKA)

GST : Where appellant engaged in business of property development entered into a joint development agreement with landowners for development of land into residential layout and cost of development shall be borne by appellant and revenue accruing from sale of plots is shared in ratio of 75 per cent for landowners and 25 per cent for appellant, since joint development agreement is entered into for two parties to jointly reap benefits of sale of land to customers, there is a clear rendering of a service by developer to landowner in developing land which belongs to landowner, therefore, activity of developing land is a supply of service by appellant

• [MAARQ Spaces (P.) Ltd., In re [2019] 111 368 (AAR - Karnataka) affirmed].

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