FA, 2020 amendment increasing...
Fact of the Case
The applicant was involved in the business of undertaking construction development projects including building residential apartments, commercial complexes, plotted townships, hotels etc.
It entered into the Memorandum of Understanding with another company (RBIPL) who was engaged in the business of acquiring and developing land either by itself or through contractors and developers. RBIPL acquired land and offered to grant Development Rights to the applicant. The applicant applied for advance judgment to determine taxability of development rights.
The Authority for Advance Ruling observed that as per Memorandum of Understanding, it was clear that the title of ownership of land vests was with the owner of the land. The transfer of development rights would not give any title or ownership in the developable land to the applicant.
Therefore, transfer of Development rights would not amount to sale of land under Entry No. 5 of Schedule III attached to CGST Act, 2017. It was held that the grant of Development Rights would be taxed under the GST Act as mere transfer of development rights would not give any title or ownership in developable land.
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