M/S Nbcc (INDIA) Limited vs. Additional Commissioner CGST Delhi South
Held
The Court held that the demand raised by CGST, Delhi South, has no merit. The Ministry of Finance, in an office memorandum dated November 30, 2025, opined that Section 86 of the CGST Act, 2017, creates joint and several liability only for goods, not for services, and therefore does not cover the present case. The Ministry further stated that where the Ministry is the principal supplier and remains available to accept any GST demand, initiation of proceedings against the agent appears to be unnecessary and without the authority of law. Consequently, the impugned order dated January 29, 2025, which confirmed a GST demand of Rs. 45.36 crore against NBCC, was set aside. The ratio decidendi is that an agent is not liable for GST on services supplied on behalf of a principal if the principal is available to discharge the liability, and the CGST Act, 2017, does not provide for joint and several liability of an agent for services supplied on behalf of a principal.
Facts
The Petitioner, M/s NBCC (India) Limited, challenged an order dated January 29, 2025, passed by the Principal Commissioner of Central Goods and Service Tax, Delhi South Commissionerate. The order confirmed a GST demand of Rs. 45.36 crore against NBCC for the financial year 2017-18 concerning the Kidwai Nagar (East) redevelopment project. NBCC was appointed as the implementing agency for this project by the Ministry of Urban Development (MoUD) through an MoU dated July 16, 2013. Funding was structured through lease proceeds from commercial and residential properties, with funds deposited into an escrow account. The Directorate General of GST Intelligence (DGGI) investigated allegations that NBCC, acting as an agent for MoUD, failed to discharge GST on lease amounts collected in the escrow account.
Key Issues
1. Whether the GST Department is pressing for the GST demands raised in the impugned order, or whether the same ought to be resolved between the GST Department and the Ministry of Urban Development (MoUD)? 2. Whether the Petitioner, NBCC (India) Limited, is liable to pay GST on lease proceeds collected in an escrow account for the Kidwai Nagar project, acting as an agent for the MoUD? Contentions of the Petitioner: The Petitioner argued that they acted solely as the executing arm of the principal (MoUD), did not appropriate lease proceeds as revenue, and all funds were deposited into an escrow arrangement managed by a committee constituted by the Ministry. They contended that there is no corresponding statutory provision in the CGST Act, 2017, extending joint and several liability for the supply of services by an agent on behalf of a principal, unlike Section 86 which applies only to goods. They also argued that since the Ministry is the principal supplier and available to accept any GST demand, initiation of proceedings against the agent (NBCC) is unnecessary and without legal authority. Contentions of the Respondent: The judgment does not explicitly record arguments made by the Respondent (Additional Commissioner CGST Delhi South). However, the impugned order itself indicates the Respondent's contention that NBCC, acting as an agent of the Ministry, rendered taxable supply of leasing services and failed to discharge GST.
Sections Cited
Section 86
AI-generated summary — verify with the full judgment below
W.P.(C) 6687/2025 $~37 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 9th December, 2025 Uploaded on: 11th December, 2025 + W.P.(C) 6687/2025 & CM APPL. 30335/2025 M/S NBCC (INDIA) LIMITED .....Petitioner Through: Mr. Bhuvnesh Satija, Ms. Vibhooti Malhotra, Mr. Udit Sharma and Mr. Aniket Khanduri, Advs. versus ADDITIONAL COMMISSIONER CGST DELHI SOUTH .....Respondent Through: Ms. Samiksha Godiyal, SSC with Mr.Tenzing N. Bhutia, Mr.B.D. Rao Kundan, Advocates CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN Prathiba M. Singh, J. (Oral)
This hearing has been done through hybrid mode.
The present petition has been filed by the Petitioner– M/s NBCC (India) Limited challenging the order dated 29th January, 2025 (‘hereinafter, the impugned order’) passed by the Office of Principal Commissioner of Central Goods and Service Tax, Delhi South Commissionerate.
In this case, the Petitioner- NBCC (India) Limited has developed the Kidwai Nagar (East) Area for General Pool Residential Accommodation, as also the commercial spaces.
It is the case of the Petitioner that a Memorandum of Understanding (hereinafter, ‘MOU’) was entered into between the NBCC (India)
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