Developers' desire for GST exemption on joint development agreements and input credits is explained.

Taxes have a big effect on project cost structures in the real estate industry, especially for large developments. Joint Development Agreements (JDAs) between developers and landowners are one situation where developers are particularly struggling because some tax incentives, such as the Input Tax Credit (ITC), are no longer available. Given the rising cost of construction materials, real estate developers are pressing the government to lower the Goods and Services Tax (GST) on these kinds of agreements. In addition to raising project costs, the existing tax structure makes it more difficult for developers, especially those involved in the affordable housing market, to control their profit margins. After a recent meeting of the GST Council's Group of Ministers (GoM) failed to come to a consensus on offering any relief to developers working on JDAs, the topic resurfaced. Developers contend that a more advantageous tax structure may lessen their financial burden and, consequently, lower the price of housing for purchasers. A Joint Development Agreement (JDA): What is it? A legal agreement to jointly develop a property is called a joint development agreement, and it is made between a landowner and a real estate developer. In these agreements, the developer builds, markets, and sells the property, and the landowner donates the land. These contracts usually specify each party's contribution, ownership shares, and profit-sharing arrangement. In this arrangement, the landowner receives a share of revenue or a service charge from the developer. In India's real estate industry, the JDA is a popular strategy since it gives developers access to valuable property for their projects and enables landowners to profit from real estate development without having to make significant building investments.