Decoding GST Implications on Joint Development Agreements (JDAs)

This agreement is entered into post the signing of JDA and GPA. It clearly demarcates the units of the constructed project that will be provided to the landowner and the units that will belong to the developer.

2.3 General Power of Attorney (GPA)

This document is entered into between the landowner and the developer to enable the developer to do certain acts on behalf of the landowner. The GPA provides the developer the right to obtain plan sanctions, obtain required registrations, apply for licenses etc

2.4 Commencement Certificate

This certificate is issued by the local authorities to signify that the project has met all the legal pre-requisites. This certificate allows the developer to begin work on this project

2.5 Completion Certificate

A completion certificate certifies that the building is constructed by following the approved building layout and the standards set by the local authority, like building height and the distance from the road, among many other things. This certificate is compulsory to apply for basic amenities like electricity and water supply

3. Key Milestones to Determine the Value

    1. Important for valuation – ‘nearest to the date on which such development rights or FSI is transferred to the promoter’
    2. Valuation of TDR and construction services on the basis of value on this date
    3. Referred to as ‘first sale value’ or ‘launch price’
      1. Important for capping of valuation of TDR – ‘remaining un-booked on the date of issuance of completion certificate or first occupation’
      2. Valuation of unsold units in TDR computation on the basis of the value on this date
      3. Referred to as ‘Last sale value’ or OC/CC value
      • Completion Certificate
      • Possession of unit

      4. Supplies Involved in a Typical JDA Project

      Supplies Involved in a Typical JDA Project

      Sl No.

      Transaction Supplier of service

      Recipient of service

      1

      Transfer of development rights Landowner