Over 25,000 buildings in Mumbai Metropolitan Region eligible for redevelopment with ₹30,000 cr value: CREDAI-MCHI
Over 25,000 buildings across the Mumbai Metropolitan Region (MMR) are eligible for redevelopment, with the total estimated project value exceeding ₹30,000 crore, according to a statement issued by real estate developers' apex body CREDAI-MCHI on May 8.
The organisation emphasized that unlocking Mumbai's full redevelopment potential requires directly addressing viability issues. "Approval costs in Mumbai stand at ₹55,200 per square metre, significantly higher than ₹1,800 in Pune and ₹5,500 in Delhi. This highlights the disproportionately high development charges in the city," CREDAI-MCHI stated.
The apex body was reacting to Bombay High Court's ruling that clarified that GST is not applicable where homeowners appoint a developer to carry out redevelopment work.
The legal representatives of CREDAI-MCHI also said that the court merely ruled that GST on development rights is not payable under the reverse charge mechanism—it did not abolish the tax altogether.
Also Read: Motilal Nagar Redevelopment: 5 things to know about Adani Group's latest acquisition in the Mumbai real estate market
The legal representatives stated that developers remain exposed to legal and financial risk until the GST Council or a larger bench of the High Court gives a conclusive verdict.
The Bombay High Court last month clarified that GST is not applicable to developers 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, noting that the agreement was purely for construction and did not involve any transfer of TDR or FSI.
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 judgment by the Nagpur bench of the Bombay High Court has been misinterpreted in some quarters as a blanket exemption from GST, which is inaccurate."
'A clear and consistent interpretation of GST law, in line with the nature of redevelopment transactions, is essential to restore confidence in the sector,' Shah said.
Also Read: Shahrukh Khan's sea-facing building on Mumbai's Carter Road may go in for redevelopment
According to Rohit Jain, Deputy Managing Partner, Economic Laws Practice (ELP), "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."
Jain said, "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," Jain said.
Also Read: Dharavi Redevelopment: 5 highlights of the master plan and the ongoing survey
"When you add layers of GST and regulatory ambiguity to that, projects simply do not take off. Solving these issues is not just about helping developers—it is about providing safer homes to thousands living in dilapidated buildings, improving urban infrastructure, and unlocking housing supply," said Sunny Bijlani, Joint Secretary, CREDAI-MCHI.
"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," Bijlani said.
The apex body concluded in the statement that the Bombay High Court judgment is expected to stimulate redevelopment in Mumbai,a city where vertical growth remains the most practical solution amid limited land availability and ageing infrastructure.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
an hour ago
- The Hindu
Infosys gets huge relief on GST as DGGI closes ₹32,400-crore pre-show cause notice
In a major relief for Infosys, the Director General of GST Intelligence has closed pre-show cause notice proceedings against the company for financial years 2018-19 to 2021-22 involving a staggering ₹32,403 crore in GST dues. The latest move effectively ends nearly a year-long GST saga for India's second-largest IT services firm. Mid-last year, the goods and services tax (GST) authorities had slapped ₹32,403 crore notice on Infosys for services availed by the company from its overseas branches for five years starting 2017. The GST demand, in fact, exceeds Infosys's annual profits — Infosys's net profit for full FY25 stood at ₹26,713 crore — and its closure now is bound to come as a significant relief for the tech major. Also Read | After ₹32,000 crore demand to Infosys, government said to mull GST notices to other IT majors The Bengaluru-headquartered company, in a BSE filing, said with the receipt of the latest communication from DGGI "this matter stands closed". 'In continuation to our earlier communications on July 31, 2024, August 1, 2024 and August 3,2024 on GST, this is to inform that the company has today received a communication from the Director General of GST Intelligence (DGGI) closing the pre-show cause notice proceedings for the financial years 2018-19 to 2021-22,' the company said in the filing late Friday (June 6, 2025) evening. Infosys, which competes with the likes of TCS, Wipro and others for global IT contracts, said it had received and responded to a pre-show cause notice issued by DGGI for the period July 2017 to March 2022 on the issue of non-payment of IGST under Reverse Charge Mechanism. 'The GST amount as per the pre-show cause notice for this period was Rs 32,403 crore. The company had on August 3, 2024 received a communication from DGGI closing the pre-show cause notice proceedings for the financial year 2017-2018. With the receipt of today's communication from DGGI, this matter stands closed,' Infosys said. Also Read | Nasscom defends Infosys, says ₹32,000-cr. GST notice shows lack of understanding of industry model In July last year, Infosys had informed that Karnataka State GST authorities issued a pre-show cause notice for payment of GST of ₹32,403 crores for the period July 2017 to March 2022 towards the expenses incurred by overseas branch offices of Infosys Ltd, and added that the company has responded to the pre-show cause notice. 'The company has also received a pre-show cause notice from Director General of GST Intelligence on the same matter and the company is in the process of responding to the same,' the filing of July 2024 had said. All along, Infosys maintained that GST is not applicable on these expenses. 'Additionally, as per a recent circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by the overseas branches to Indian entity are not subject to GST,' Infosys had argued back in July 2024. The tech firm had asserted GST payments are eligible for credit or refund against export of IT services. 'Infosys has paid all its GST dues and is fully in compliance with the central and state regulations on this matter,' the company had contended. The document sent to Infosys by GST authorities at that point had reportedly said, 'In lieu of receipt of supplies from overseas branch offices, the company has paid consideration to the branch offices in the form of overseas branch expense. Hence, M/s Infosys Ltd, Bengaluru is liable to pay IGST under reverse charge mechanism on supplies received from branches located outside India to the tune of Rs 32,403.46 crores for the period 2017-18 (July 2017 onwards) to 2021-22.' The Directorate General of GST Intelligence in Bengaluru had been of the opinion that Infosys did not pay the Integrated-GST (IGST) on the import of services as a recipient of services. For the just-ended March quarter, Infosys reported an 11.7 per cent decline in consolidated net profit to ₹7,033 crore mainly on account of compensation to employees, and acquisitions during the reported period. The company has guided for a revenue growth of 0% to 3% in constant currency terms in the current fiscal year, citing uncertainty in the environment. For the full FY25, profits saw a marginal increase of 1.8% to ₹26,713 crore; revenues climbed 6.06% to reach ₹1,62,990 crore - exceeding its guidance of 4.5% to 5% for the full FY25.
&w=3840&q=100)
Business Standard
3 hours ago
- Business Standard
UP CM directs officials to take action against fake, shell companies
Uttar Pradesh Chief Minister Yogi Adityanath on Saturday directed officials to take action against shell companies to stop the attempts to misuse the facilities meant for genuine traders. While conducting a high-level review of the State Tax Department, the CM directed officials to ensure transparency in tax collection and adopt a policy of technological efficiency and strict enforcement. "Tax evasion is a national crime that negatively impacts development plans and welfare schemes," he said. Stressing that the Goods and Services Tax (GST) is a consumer-based tax system, he noted that areas with higher population density are naturally expected to generate more tax revenue. He instructed officials to develop special strategies for zones where tax collection is below average. Adityanath directed that information on suspicious firms registered under Central GST (CGST) be shared with the Centre for cancellation of their registration. For firms under State GST (SGST), he ordered in-depth departmental investigations, and if irregularities are found, their registration should be canceled and FIRs lodged. The CM emphasised the need for on-site inspection of all newly registered firms, stating "fake companies should not be allowed to obstruct the rights of honest taxpayers. CM Adityanath said that such acts are an attempt to misuse the facilities meant for genuine traders, which is unforgivable. Such inspections are essential to ensure that genuine businesses can operate fairly and without interference," he said. During the meeting, officials informed the CM that Rs 18,161.59 crore in GST and VAT had been collected during April and May against the financial year 2025-26 target of Rs 1,75,725 crore.
Time of India
3 hours ago
- Time of India
Zoho founder Sridhar Vembu Surges Union government to simplify rules, regulations for startups
Coimbatore: Simplification of rules and regulations, including those related to GST, licensing and bank loans, is the need of the hour to propel the growth of startups, said Zoho founder Sridhar Vembu here on Saturday. He was speaking at the first demo day organized by the Coimbatore-based startup incubator Aalamaram to celebrate the 23 startups it successfully nurtured and showcase their offerings. Six startups exhibited their products at the event, which saw participation of several startup founders and investors. Speaking after the event, Sridhar Vembu said all the 23 startups should be nurtured in a big way so that billion-dollar enterprises could emerge from them. "Not every startup may be successful. It is not important what percentage of startups succeed. What matters is how many jobs are created through startups," he said. When asked about the kind of support the govt should provide, he said the Union govt had already simplified several procedures to benefit startups. However, further simplification is needed, particularly in GST compliance, licensing and access to bank loans, he said. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo "In my opinion, the govt should not fund startups, as it could lead to favouritism and corruption. The startup ecosystem should remain private. The govt's role should be limited to providing easy approvals and relaxed regulations," Sridhar Vembu said.
