NBCC (India) Limited Vs Additional Commissioner CGST Delhi South (Delhi High Court)
Delhi High Court has intervened in a dispute concerning a Goods and Services Tax (GST) demand raised by the Directorate General of GST Intelligence (DGGI) on M/s NBCC (India) Limited. The demand pertains to funds held in an ESCROW account, which NBCC maintains for the re-development of the Kidwai Nagar (East) area and are ultimately intended for the Ministry of Urban Development (MoUD) or the Consolidated Funds of India.
NBCC (India) Limited, the petitioner, developed the Kidwai Nagar (East) project for residential and commercial spaces under a Memorandum of Understanding (MoU) with the MoUD, signed on July 16, 2013. An ESCROW agreement was subsequently established between NBCC, the MoUD, and Union Bank of India to manage lease proceeds from the project, with NBCC acting as the implementing agency.
The DGGI initiated an investigation into NBCC regarding the Kidwai Nagar project, alleging that GST was payable on the amounts collected in the ESCROW account. The impugned order, dated January 29, 2025, from the Principal Commissioner of Central Goods and Service Tax, Delhi South Commissionerate, formalized this demand.
NBCC contends that the funds are received from two types of entities: business and non-business. Non-business entities include Government Departments, Autonomous Bodies, and Public Sector Undertakings (PSUs). NBCC highlights that Government Departments and Autonomous Bodies are exempt from GST. For other entities, GST is to be deposited under the reverse charge mechanism, rendering the demand against NBCC “completely untenable.”
