The Telangana High Court ruled that the transfer of development rights (TDR) is considered a service under the GST Law, as it involves the landowner offering development rights to a developer for a consideration. The court clarified that there is no automatic transfer of ownership or title rights over the land to the developer, and the eventual transfer of land would happen only after the completion certificate was issued. The court rejected the contention that the Joint Development Agreement (JDA) itself constituted a sale of land, emphasizing that the transfer of ownership occurred after the completion of the project. Additionally, the court noted the GST Council’s recommendation and the subsequent notification shifting the liability to pay GST on transfer of development rights to the developer-promoter under reverse charge.
Source DA Advisors
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