HC Sets Aside GST Demand on Govt Enterprise’s Lease Proceeds

  • Blog|News|GST & Customs|
  • < 1 minute
  • By Taxmann
  • |
  • Last Updated on 27 December, 2025

Latest from Taxmann

GST demand on government lease proceeds

Case Details: NBCC (India) Ltd. vs. Additional Commissioner CGST Delhi South - [2025] 181 taxmann.com 604 (Delhi)

Judiciary and Counsel Details

  • Prathiba M. Singh & Shail Jain, JJ.
  • Bhuvnesh Satija, Ms Vibhooti Malhotra, Udit Sharma & Aniket Khanduri, Advs. for the Petitioner.
  • Ms Samiksha Godiyal, SSC, Tenzing N. Bhutia & B.D. Rao Kundan, Advs. for the Respondent.

Facts of the Case

The petitioner, a government enterprise, undertook the redevelopment and executed a memorandum of understanding (MOU) with the Ministry of Urban Development. An escrow agreement appointed the petitioner as the agency to manage lease proceeds, which were credited to escrow for onward transfer to the Ministry or the Consolidated Fund. The receipts originated from Government Departments, autonomous bodies, PSUs, and others. The Directorate General of GST Intelligence investigated the project and the escrow collections, confirming a GST demand on the escrow receipts. It was contended that the GST demand was unsustainable. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the GST demand raised lacked merit in view of the Ministry of Finance’s office memorandum. The Court observed that the memorandum clarified the treatment of escrow receipts from redevelopment projects and addressed the applicability of exemption and reverse charge mechanisms under Section 9 of the CGST Act. It was concluded that the petitioner’s claims were consistent with the memorandum and that the GST demand could not be sustained. Consequently, the Court set aside the impugned order.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied