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Time of India
07-05-2025
- Business
- Time of India
Landowners get interim court relief from GST on joint development pacts
Live Events The Bombay High Court has granted interim relief to petitioners in a key Goods and Services Tax (GST) dispute involving the treatment of development rights under revenue-sharing joint development a case that could have wider implications for the real estate landscape across India, a group of landowners had approached the court to challenge the levy of GST on development rights transferred under such court has issued notice to the authorities and granted interim relief, restraining any further action on the impugned tax dispute centers on whether the transfer of development rights by landowners, typically in exchange for a share in the developed property or revenue, is a 'supply' of services liable to GST, or a 'sale of land' which falls outside the scope of GST under the constitutional framework and the GST on behalf of the landowners, Abhishek A Rastogi, founder of Rastogi Chambers, submitted that the transfer of development rights is an intrinsic part of land ownership and cannot be treated as a distinct service for the purposes of GST.'The issue strikes at the very root of the GST architecture,' Rastogi said. 'Development rights that are part of the land cannot be artificially severed and taxed as services. The legislative intent, including the specific amendments and clarifications introduced from April 1, 2019, need to be interpreted in line with constitutional guarantees and the basic scheme of the GST law.'The division bench, after hearing initial submissions from both sides, observed that the petition raises important questions regarding the taxability, point of taxation, and the person liable to pay court has issued a Rule and granted interim relief by restraining the tax authorities from enforcing the disputed order until further hearing. The respondents have been directed to file their affidavit-in-reply within four case is likely to have wider implications for real estate taxation under the GST regime, particularly in how development rights are classified and taxed.
New Indian Express
06-05-2025
- Business
- New Indian Express
Game of skills involving money is gambling: Govt to SC
The government has informed the country's apex court that the moment a financial stake is introduced—even in games requiring skill—the activity becomes a form of betting and gambling. This submission was made as a crucial hearing on the applicability of GST to online gaming, fantasy sports, and casinos began on Monday in the Supreme Court. The government contended that such activities fall squarely within the purview of taxable actionable claims under the Central Goods and Services Tax (CGST) Act, 2017. A bench comprising Justices J.B. Pardiwala and R. Mahadevan is examining whether the Goods and Services Tax (GST) is lawfully applicable to online games, fantasy sports platforms, and casinos, particularly when they involve monetary stakes. The GST department's argument is based on the premise that once money is staked, the game—regardless of whether it involves skill or chance—enters the domain of gambling, a position previously upheld by Supreme Court judgments. Citing state laws, the revenue department has argued that state gambling statutes exempt games of skill from criminal prosecution only when played without stakes. 'When stakes are involved, such games may be considered gambling,' it stated in court. The revenue department has further submitted that the 101st Constitutional Amendment transferred taxing powers for betting and gambling to the Centre under Article 246A. It, therefore, argues that regulatory powers of the states cannot be construed as taxation powers. The government has also stated that the 2023 amendment was merely clarificatory in nature, asserting that the power to tax actionable claims existed even before the amendment. Abhishek A. Rastogi, founder of Rastogi Chambers and counsel for one of the petitioners before the Supreme Court, said: 'If games of skill are treated as gambling solely because of monetary stakes, we risk blurring crucial legal boundaries. The decision will not just impact revenue collection, but the future of lawful, skill-based digital enterprises across India.' The government contends that a 28% GST should apply to the total contest entry amount, effectively taxing the entire prize pool. However, gaming companies argue that GST should only be levied on their platform fees or commission, as many of these games involve skill rather than chance.
Time of India
22-04-2025
- Business
- Time of India
Landowners seek GST relief on joint development agreements
Several landowners have approached the courts seeking relief from the Goods and Services Tax (GST) authorities' decision to recover tax from landowners involved in joint development agreements (JDAs) in the real estate sector . While these matters are pending in the courts of Mumbai, Telangana, and all three courts of the National Capital Region, a specific petition in the Bombay High Court was filed in the first week of April. In this case, a total of 10 landowners have filed the petition. At the heart of the dispute lies the taxation of development rights transferred by landowners to developers in exchange for a portion of the constructed area or revenue sharing. The GST authorities have sought to tax landowners in a barter transaction of supply of development rights who receive construction services under the forward charge for rendering services of transfer of development rights. This is instead of reverse charge mechanism, where the recipient of the service, rather than the provider, is liable to pay GST. The matter is currently under legal scrutiny, and its outcome may affect future structuring of JDAs across the country. ET has seen the copy of GST notices issued to the landowners. The applicability of 18% GST is expected to impact real estate projects across major property markets nationwide marking a pivotal shift in the cost dynamics of joint developments and redevelopment projects. Landowners are contesting the tax demand, arguing that the transaction in question is not taxable at all, let alone under the reverse charge framework. They contend that transferring development rights in this manner does not qualify as a supply of service attracting GST and have accused the authorities of misinterpreting the tax provisions. 'This dispute essentially revolves around three core issues--taxability, the point of taxation, and the person liable to pay tax, particularly the applicability of the reverse charge mechanism,' said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing the landowners in the matter before the Bombay High Court. According to him, the legislative intent, as reflected through a series of earlier notifications issued with effect from April 1, 2019, need to be carefully considered while determining the tax implications in such cases. "The nuances of when the tax liability arises, whether the transaction itself is taxable, and who should be responsible to discharge that liability are questions that go to the root of the matter,' he added. The outcome of this legal challenge is expected to set an important precedent, clarifying the tax treatment of joint development agreements under GST. Industry stakeholders including developers are closely watching the case, given its potential to reshape the structuring of real estate collaborations in the years ahead. Industry associations and real estate developers have also expressed concern over the issue, cautioning that an adverse ruling could increase costs for landowners. This may also disrupt the delicate financial structures of joint development and redevelopment projects, especially in land-scarce urban centres like Mumbai, Bengaluru, and Delhi-NCR. The applicability of 18% GST under the disputed framework threatens to significantly alter cost dynamics across major property markets.
Economic Times
21-04-2025
- Business
- Economic Times
Landowners seek GST relief on joint development pacts
Several landowners have approached the courts seeking relief from the Goods and Services Tax (GST) authorities' decision to recover tax from landowners involved in joint development agreements (JDAs) in the real estate sector. While these matters are pending in the courts of Mumbai, Telangana, and all three courts of the National Capital Region, a specific petition in the Bombay High Court was filed in the first week of April. In this case, a total of 10 landowners have filed the petition. At the heart of the dispute lies the taxation of development rights transferred by landowners to developers in exchange for a portion of the constructed area or revenue GST authorities have sought to tax landowners in a barter transaction of supply of development rights who receive construction services under the forward charge for rendering services of transfer of development rights. This is instead of reverse charge mechanism, where the recipient of the service, rather than the provider, is liable to pay matter is currently under legal scrutiny, and its outcome may affect future structuring of JDAs across the country. ET has seen the copy of GST notices issued to the landowners. The applicability of 18% GST is expected to impact real estate projects across major property markets nationwide marking a pivotal shift in the cost dynamics of joint developments and redevelopment are contesting the tax demand, arguing that the transaction in question is not taxable at all, let alone under the reverse charge framework. They contend that transferring development rights in this manner does not qualify as a supply of service attracting GST and have accused the authorities of misinterpreting the tax provisions.'This dispute essentially revolves around three core issues--taxability, the point of taxation, and the person liable to pay tax, particularly the applicability of the reverse charge mechanism,' said Abhishek A Rastogi, founder of Rastogi Chambers, who is representing the landowners in the matter before the Bombay High to him, the legislative intent, as reflected through a series of earlier notifications issued with effect from April 1, 2019, need to be carefully considered while determining the tax implications in such cases."The nuances of when the tax liability arises, whether the transaction itself is taxable, and who should be responsible to discharge that liability are questions that go to the root of the matter,' he outcome of this legal challenge is expected to set an important precedent, clarifying the tax treatment of joint development agreements under stakeholders including developers are closely watching the case, given its potential to reshape the structuring of real estate collaborations in the years associations and real estate developers have also expressed concern over the issue, cautioning that an adverse ruling could increase costs for may also disrupt the delicate financial structures of joint development and redevelopment projects, especially in land-scarce urban centres like Mumbai, Bengaluru, and Delhi-NCR. The applicability of 18% GST under the disputed framework threatens to significantly alter cost dynamics across major property markets.
