GST on JDAs: Liability Arises Only on Conveyance, Not at Agreement Stage

Provident Housing Ltd. Vs Union of India & Ors. (Bombay High Court)

No GST at the time of entering into a JDA but, will arise at transfer/possession via conveyance/allotment letter only with actual transfer under conveyance

The Hon’ble Bombay High Court in the case of Provident Housing Ltd. v. Union of India & Ors. [Writ Petition No. 5 of 2022, order dated August 21, 2025] held that there is no GST liability on the developer under a Joint Development Agreement (JDA) when the developer becomes the owner of the property pursuant to conveyance, rendering all prior claims under the JDA extinguished.

Facts:

Provident Housing Ltd. (‘the Petitioner’) is a real estate developer that entered into a Joint Development Agreement (“JDA”) with Trinitas Realtors India LLP (the landowner) on 13.10.2017, for construction of a residential project.

Union of India & Ors. (“the Respondent”), including GST authorities, demanded GST at 12% on construction services allegedly supplied at the date of entering into the JDA, relying on then-applicable legislation and notifications. The Petitioner thus deposited ₹7 crores under protest.

The Petitioner contended that no GST was payable at the time of entering into the JDA; that, as per Notification No. 4/2018-Central Tax (Rate), liability arises only upon transfer/possession via conveyance/allotment; and, post-transfer, they had become property owner and all JDA rights and obligations stood extinguished by mutual agreement and sale deed. The Petitioner also argued that any proceedings for earlier periods were time-barred under Section 73, 74, and 75 of the CGST Act.