Mumbai, 9th May 2025 : CREDAI-MCHI today hosted a focused knowledge
seminar at its Mumbai office to decode the implications of the recent Bombay
High Court order in the matter of M/s Shrinivasa Realcon Pvt. Ltd. vs. Deputy
Commissioner, Anti-Evasion Branch, a ruling that has delivered significant GST
relief for homeowners involved in redevelopment projects.
The seminar featured expert insights from a
distinguished panel including Mr. Sunny Bijlani, Joint Secretary, CREDAI-MCHI,
Mr. Rohit Jain, Deputy Managing Partner at Economic Laws Practice (ELP); and
Mr. Harsh Shah, Partner at ELP. The Bombay High Court’s ruling clarified that
GST is not applicable where homeowners appoint a developer to carry out
redevelopment work, provided there is no sale or transfer of development rights
(TDR) or Floor Space Index (FSI). The Court quashed the tax demand under Entry
5B of the relevant GST notification, noting that the agreement was purely for
construction and did not involve any transfer of TDR or FSI as per Maharashtra’s
Unified DCPR.
Mr. Sunny Bijlani, Joint Secretary,
CREDAI-MCHI
highlighted, “"If Mumbai is to
realise its full redevelopment potential, we must address viability challenges
head-on. The stark difference in approval costs—₹55,200 per square metre in
Mumbai compared to ₹1,800 in Pune and ₹5,500 in Delhi—shows how
disproportionately high our development charges are. When you add layers of GST
and regulatory ambiguity to that, projects simply don’t take off. Solving these
issues isn't just about helping developers—it's about providing safer homes to
thousands living in dilapidated buildings, improving urban infrastructure, and
unlocking housing supply. Fixing GST interpretation and aligning taxation to
ground realities can significantly accelerate redevelopment. These are
low-hanging fruits with massive economic and social impact, and we urge
decision-makers to act swiftly."
Mr. Harsh Shah. Partner, Economic Laws
Practice (ELP)added, "The
confusion around the GST treatment of development rights has resulted in a wave
of litigations across the country—with cases pending in Bombay, Delhi, Gujarat,
and Karnataka High Courts. The judgement by the Nagpur bench of the Bombay High
Court has been misinterpreted in some quarters as a blanket exemption from GST,
which is inaccurate. The court merely ruled that GST on development rights is
not payable under the reverse charge mechanism—it did not abolish the tax
altogether. Until the GST Council or a larger bench of the High Court gives a
conclusive verdict, developers remain exposed to legal and financial risk. A
clear and consistent interpretation of GST law, in line with the nature of
redevelopment transactions, is essential to restore confidence in the sector.”
Mr. Rohit Jain, Deputy Managing Partner,
Economic Laws Practice (ELP) mentioned, "The redevelopment model is critical to achieving the goal of
‘Housing for All’, especially in urban centres like Mumbai. However, the
current GST regime has inadvertently made many of these projects financially
unviable. Developers today face up to four layers of GST—5% on sale to
customers, 18% on transfer of development rights, 5% on units handed back to
existing residents, and non-creditable GST on construction materials. These
cascading taxes severely impact margins and slow down redevelopment. It is
important to clarify that despite recent High Court rulings, GST is still
applicable—either under forward or reverse charge mechanisms—and the confusion
in interpretation must be addressed urgently. CREDAI-MCHI, along with several
developers, has made detailed representations to the GST Council, and we hope
for swift intervention to reclassify development rights as immovable property,
which should not attract GST under prevailing laws."
According to CREDAI-MCHI, over 25,000 buildings
in the MMR are eligible for redevelopment, with an estimated project value
exceeding ₹30,000 crore. The Maharashtra Housing and Area Development Authority
(MHADA) has already initiated structural audits for nearly 13,000 cessed
buildings in South Mumbai, underscoring the urgent need for redevelopment.
The judgment is expected to stimulate
redevelopment in Mumbai—a city where vertical growth remains the most practical
solution amid limited land availability and aging infrastructure.
CREDAI-MCHI reiterated its commitment to
facilitating smoother redevelopment processes and supporting housing societies
with clearer legal frameworks. The organization also announced its upcoming
initiatives, including the second edition of the EODR Exhibition, aimed at
showcasing best practices and easing challenges in redevelopment.
ABOUT CREDAI-MCHI
CREDAI-MCHI is an apex body comprising members
from the Real Estate Industry in the Mumbai Metropolitan Region (MMR). With an
impressive membership of over 1800+ leading developers in MMR, CREDAI-MCHI has
extended its reach throughout the region, establishing units in various
locations such as Thane, Kalyan-Dombivli, Mira-Virar, Raigad, Navi Mumbai,
Palghar-Boisar, Bhiwandi, Uran-Dronagiri, Shahapur-Murbad, and most recently in
Alibag, Karjat-Khalapur-Khopoli, and Pen. Being the only Government-recognized
body for private sector developers in MMR, CREDAI-MCHI is dedicated to
promoting the industry’s organization and progress.
As a part of CREDAI National, an apex body of
13000 developers across the nation, CREDAI-MCHI has emerged as a preferred
platform for regional discussions on housing and habitat by establishing close
and strong ties with the government. It is committed to breaking barriers to
create a strong, organized, and progressive real estate sector in the MMR.The
vision of CREDAI-MCHI is to empower the Real Estate fraternity of the Mumbai
Metropolitan Region as it preserves, protects, and advances the right to
housing for all. To continue being a trusted ally, guiding their members,
supporting the Government on policy advocacy, and assisting those they serve
through the ever-evolving real estate fraternity.
Website: https://mchi.net/