Table of Content
The Maharashtra Real Estate Appellate Tribunal (MREAT) has ruled that homebuyers cannot seek a refund of GST, stamp duty, TDS, or other statutory charges from developers in cases of delayed possession. The tribunal clarified that such taxes are paid directly to government authorities and are not retained by the developer. Homebuyers must approach the relevant departments for any refunds.
Case Background
The case involved a homebuyer who booked a 1,000 sq. ft apartment in Mumbai’s western suburbs in January 2017 for over ₹2 crore. The agreement stipulated possession by December 2019, with a grace period extending to December 2020. The project faced delays and received only a partial occupation certificate in July 2022.
Following the delays, the buyer opted to withdraw from the project and sought a refund for the full amount paid, including GST, TDS, stamp duty, registration fees, and interest.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) initially directed the developer to refund the consideration amount along with interest, but did not include statutory taxes. The homebuyer then approached MREAT seeking refunds for these taxes.
Tribunal’s Findings
MREAT noted that taxes such as GST, MVAT, TDS, stamp duty, and registration fees are statutory payments made to government authorities. Developers act only as collection agents and do not retain or benefit from these amounts.
The tribunal cited Section 18(1) of the RERA Act, which obligates developers to refund only the amount received from the buyer when an allottee withdraws from a project. Statutory levies do not form part of this consideration.
- TDS: Paid directly by the buyer to the Income Tax Department; the developer only receives credit.
- GST & MVAT: Collected from buyers and remitted to the government.
- Stamp Duty & Registration Charges: Paid by buyers in their own name.
Since developers do not profit from these payments, they cannot be ordered to refund them. Homebuyers must approach the respective authorities to claim any refunds.
Also Read: Housing Sales in India’s Tier-2 Cities: Sales Fall 4% YoY, but Value Rises 4% in Q3 2025
Legal Expert Opinion
Legal experts welcomed the ruling, saying it provides clarity on the scope of developers’ liabilities in delayed possession cases.
Trupti Daphtary, a Mumbai-based solicitor, said:
“This ruling clarifies that developers are not liable to refund statutory taxes. The Bombay High Court is expected to give a final determination on whether homebuyers can claim such amounts or interest under Section 18 of RERA.”
Key Takeaway for Homebuyers
Homebuyers must understand that in cases of delayed possession:
- Refunds from developers are limited to the principal amount and interest.
- Statutory payments like GST, TDS, stamp duty, and registration fees must be claimed directly from government authorities.
- Maintaining all receipts and payment proofs is crucial when seeking refunds.
The tribunal’s decision emphasizes that while developers must comply with RERA timelines and refund amounts due for delayed possession, statutory taxes remain the responsibility of the homebuyer to recover.
Conclusion
The MREAT ruling underscores that while developers are accountable for refunding amounts related to delayed possession under RERA, statutory levies like GST, TDS, stamp duty, and registration charges remain the responsibility of the homebuyer. This decision brings clarity to real estate transactions in Maharashtra and highlights the importance of understanding the scope of refunds in housing projects.
As legal proceedings continue at the Bombay High Court, this ruling serves as a critical reference for homebuyers, developers, and legal professionals navigating delays and refunds in India’s real estate market.
_1764148581.webp)
Ans 1. No. The Maharashtra Real Estate Appellate Tribunal (MREAT) ruled that GST paid by buyers cannot be refunded by developers, as it is a statutory payment remitted directly to the government.
Ans 2. No. Stamp duty and registration fees are paid in the buyer’s name to government authorities and cannot be refunded by developers, even in case of delayed possession.
Ans 3. No. TDS is paid directly by the buyer to the Income Tax Department. Developers only receive credit and are not liable to refund it.
Ans 4. Developers are obligated to refund the principal amount paid by the buyer along with interest, as per Section 18 of the RERA Act. Statutory taxes are excluded.
Ans 5. Buyers must approach the respective government authorities (GST department, Income Tax Department, and local stamp duty office) to claim refunds of statutory payments.
Ans 6. The tribunal clarified that developers act only as collection agents for statutory taxes and do not retain or benefit from these amounts, so refunds cannot be directed to them.
Ans 7. No. Developers must still comply with RERA timelines for refunding principal amounts and interest, but statutory taxes remain the buyer’s responsibility to recover.
Ans 8. Homebuyers should maintain all receipts, payment proofs, and documentation when approaching government authorities to claim GST, TDS, stamp duty, or registration fee refunds.
Ans 9. Yes. The Bombay High Court may provide a final determination on whether homebuyers can claim any statutory amounts or interest under Section 18 of RERA.