Case Of: M/S Shrinivasa Realcon Pvt Ltd.
Issued By: Bombay High Court
Order No: WP No. 7135 OF 2024
Date: 8th April 2025
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M/s ShrinivasaRealconPvt. Ltd. was appointed as a developer by the landowner to construct a multi-storeycomplex on an 8,000 sq. ft. land in MouzaLendra.
As per the development agreement dated January 7, 2022, consideration involved ₹7 croresand two apartments; the developer was to hand over certain constructed units to the landowner.
The GST department issued two SCNs claiming GST liability under Entry 5B of Notification dated June 28, 2017, revised on March 29, 2019.
The petitioner challenged the applicability of GST, contending that the transaction does not involve a supply of Transfer of Development Rights (TDR) or Floor Space Index (FSI) as defined under applicable regulations.
The Bombay High Court (Nagpur Bench) noted that the agreement involved construction for the landowner, not a transfer of development rights for independent commercial use by the developer.
It held that the transaction did not fall within the scope of Entry 5B of the notifications dated June 28, 2017, or March 29, 2019.
The Court observed that the rights granted to the developer through the development agreement, enabling them to construct buildings and transfer certain
built-up units for consideration, do not equate to TDR as outlined in the notification.
Accordingly, the SCNs and the proposed order were quashed and set aside; the Court held no GST was payable on the transaction.