The joint venture agreement describes the purpose of the joint venture and other conditions of the joint venture. It serves as a legal document in case of dispute between joint ventures. 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). In the land use agreement, landowners enter into an agreement with the developer under which the landowner grants the developer development rights for the construction or development of a complex. In return, the developer agrees to allocate part of the built-up area in the form of dwellings. After April 1, 2019, the real estate sector changed significantly in terms of the impact on GST. It is therefore important to rethink the law, to understand the effects of taxation and other aspects in order to a common development agreement.
Joint development agreements are generally concluded either on the basis of revenue distribution or on the basis of land distribution. In this article, we will take a walk through the provisions of the land-sharing agreement. In the real estate sector, there is often a model of tripartite business models known as the Joint Development Agreements. Due to the high land prices, the possibility of such agreements has become normal in the sector. 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.