Deemed Deduction applicable to Joint Venture Agreements: CBEC Asst Commissioner Clarifies Issues on Construction Services under GST

Deemed Deduction applicable to Joint Venture Agreements: CBEC Asst Commissioner Clarifies Issues on Construction Services under GST


The Assistant Commissioner, Central Board of Excise and Customs (CBEC), on Tuesday clarified that one third deemed deduction on account of transfer of land also covers transfers as per the Joint venture agreements.

The Officer, in an application filed by the SI Properties (Kerala) Pvt Ltd, had also clarified that such deduction cannot be availed for unit transferred to the land owner by the Developer.

Presently, construction services are taxable at 18 per cent under the new Goods and Services Tax (GST) regime subject to the provisions of Notification No. 8/2017 (Integrated Tax (rate)). For such services, deemed deduction of one third of value of supply is available on account of transfer of land or undivided share of land if the transactio value includes the value of land transferred as per and delineated as per the provisions of the above Notification.

However, the said deemed deduction is not available when there is no transfer of land or undivided share of land.

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