Bombay HC grants interim relief in GST dispute over development rights

Bombay High Court restrains GST authorities from acting on 18 per cent tax demand for development rights, saying TDR may qualify as sale of land exempt from GST

In a significant ruling, the Bombay High Court has granted interim relief to landowners challenging the levy of 18 per cent Goods and Services Tax (GST) on development rights under revenue-sharing agreements. The court’s decision, delivered on April 29, temporarily restrains tax authorities from enforcing a contested order issued on January 27, 2025, and raises critical questions about the classification of such transactions under GST laws.

 

Development rights under a revenue-sharing model refer to agreements where a landowner allows a developer to construct on their land, and instead of receiving a fixed payment or area, the landowner gets a pre-agreed