NBCC (India) Limited Vs Additional Commissioner CGST (Delhi High Court)
The Delhi High Court examined a writ petition challenging a GST demand of ₹45.36 crore arising from the redevelopment of Kidwai Nagar (East), New Delhi. The project was undertaken pursuant to a Memorandum of Understanding dated 16 July 2013 between a government enterprise and the Ministry of Urban Development (now Ministry of Housing and Urban Affairs), under which the petitioner acted as the implementing agency. An escrow agreement was executed with a public sector bank for managing lease proceeds from the project. The GST authorities initiated an investigation and passed an adjudication order dated 29 January 2025, alleging that GST was payable on lease amounts collected in the escrow account during FY 2017–18, treating the petitioner as an agent rendering taxable leasing services on behalf of the Ministry.
The petitioner contended that lease receipts were obtained from government departments, autonomous bodies, public sector undertakings, business entities, and non-business entities, and that applicable exemptions or reverse charge mechanisms applied. It was argued that the demand was untenable as the petitioner did not appropriate lease proceeds as revenue and functioned only as an executing arm of the Ministry. During the proceedings, the High Court directed coordination between the Ministry of Housing and Urban Affairs and the Ministry of Finance to clarify the GST position. A meeting of senior officials was held, followed by an affidavit and a representation by the petitioner.
