In a significant relief for Maharashtra’s real estate sector.

The Nagpur bench of Bombay High Court quashed a GST demand against Shrinivasa Realcon, ruling no taxable transfer of development rights (TDR) occurred. The court found the developer used only existing or statutorily increased FSI, without acquiring external TDR. Senior counsel Akshay Naik highlighted that the GST Act does not define 'transfer of development rights,' and the agreement lacked any reference to such a transfer. The bench held that Entry 5B of the GST notification could not apply here, rejecting reliance on Clause 18 of the contract. Both the show-cause notice and final GST order were set aside, offering crucial clarity on tax treatment of similar development agreements.