No GST Liability under Entry 5B for Development Agreements Without TDR/FSI Transfer: Bombay HC

The Bombay High Court has ruled that no GST liability arises under Entry 5(b) of Schedule III of the CGST Act for development agreements that do not involve the transfer of Transferable Development Rights (TDR) or Floor Space Index (FSI). Entry 5(b) relates to the sale of land and building. The court reasoned that if the development agreement pertains purely to the development of land without any transfer of TDR or FSI, it does not fall under the purview of Entry 5(b) and hence is not subject to GST. This ruling provides clarity on the GST implications of different types of development agreements, particularly those that are essentially for construction services on land without the transfer of development rights.