Real estate and infrastructure transactions raise difficult questions about what is a supply and what is a transfer of immovable property. This digest brings together eight recent rulings on development agreements, assignment of leasehold rights, sale of partly constructed property and annuities for road projects.
Each heading links to our detailed posts.
Key trends from these rulings
- Assignment of leasehold rights in industrial plots is treated as a transfer of immovable property, not a supply; GSTAT Surat followed the Gujarat High Court, against which the Supreme Court dismissed the Revenue's SLP.
- Development agreements are being tested closely: an ordinary development agreement is not a transfer of TDR under Entry 5B (Shrinivasa Realcon), and courts have stayed demands on revenue-sharing and joint development arrangements (Nirmal Lifestyle, Arham Infra and Nirmite).
- Sale of a partly built building without any construction service is outside GST, leading to a Rs 14.32 crore refund (Rohan Corporation).
- For road projects, the Karnataka High Court held the entire annuity exempt and quashed a contrary circular, while the Meghalaya High Court sent a similar dispute to appeal.
Development agreements and TDR
- Bombay HC (Nagpur) - Shrinivasa Realcon: Bombay HC Nagpur quashes RCM demand under Entry 5B: rights a developer gets from a landowner under a development agreement are not TDR or FSI transfer.
- Bombay HC - Nirmal Lifestyle (interim): Bombay HC issues Rule and stays an order levying GST on development rights under a revenue-sharing agreement, finding a prima facie case. Interim order.
- Supreme Court - Arham Infra and Nirmite Buildtech (stay): Supreme Court stays CGST Nashik orders on joint development agreements after the Bombay HC dismissed writs on alternate remedy. Both orders explained.
Leasehold rights and sale of property
- GSTAT Surat - Pragna Chemical: GSTAT Surat dismisses department appeals: assignment of GIDC leasehold plots is transfer of immovable property, not taxable; SC has dismissed Revenue SLPs.
- Bombay HC - Panacea Biotec: Bombay HC sets aside GST order on assignment of leasehold land and building because the officer wrongly recorded that no reply was filed; fresh hearing ordered.
- Karnataka HC - Rohan Corporation: Karnataka HC orders refund of ₹14.32 crore GST paid on purchase of a partly built mall in liquidation: sale without construction service is outside GST.
Road and infrastructure annuities
- Karnataka HC - DPJ Bidar-Chincholi: Karnataka HC quashes CBIC circular of 17.06.2021 denying exemption on annuity for road construction; Notifications 32 and 33/2017 exempt the whole annuity.
- Meghalaya HC - Jorabat Shillong Expressway: Meghalaya HC declines writ against GST demand on BOT annuity for the Jorabat-Shillong highway; liberty to appeal under section 107 within four weeks.
What businesses should do now
- Review demands on assignment of GIDC, MIDC or similar leasehold plots in light of the Gujarat and Bombay High Court rulings.
- Structure development agreements carefully and document exactly what rights are transferred and for what consideration.
- Buyers of partly built properties should examine whether GST was correctly charged and whether a refund is possible.
- Road concessionaires should check how annuity payments are treated under Notifications 32 and 33/2017.
Frequently asked questions
Is GST payable on assignment of leasehold rights in industrial plots?
The Gujarat and Bombay High Courts held no, and GSTAT Surat followed them after the Supreme Court dismissed the Revenue's SLPs.
Is GST payable on sale of a partly constructed building?
The Karnataka High Court held that a sale without any construction service is outside GST.
Need help with a GST dispute?
GST Folio prepares replies to show cause notices, appeals before the Appellate Authority and GSTAT, refund claims and ITC reconciliations for businesses across India. Call or WhatsApp +91 80513 31315 or email gstfolio@zohomail.in.
This digest summarises judgments and orders added to our case law library in October 2026. Each linked post explains one ruling in more detail. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.