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/
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