Cuttack Housing for All Project Faces ₹10 Crore GST Probe Over Transfer of Development Rights

A housing project developed under the central government's "Housing for All" initiative in Cuttack, Odisha, has reportedly come under the scanner of GST authorities over an unpaid tax liability of approximately ₹10 crore related to transfer of development rights (TDR).

Project Background and Development Details

The project in question was reportedly executed on a 3.63-acre land parcel located in sectors 8 and 11 of Cuttack, in collaboration with the local development authority. According to available information, the developer constructed a total of 870 housing units — comprising 550 units for Economically Weaker Section (EWS) households and 320 units designated for Low Income Group (LIG) beneficiaries. The construction was reportedly completed in September 2023.

While developers under PMAY-U 2.0 and similar housing schemes are expected to comply with all statutory obligations, reports indicate that the GST on construction services and delayed-compliance interest was paid by the developer in this case. However, the tax liability arising from the transfer of development rights was allegedly not settled.

GST Liability and Regulatory Escalation

Authorities have reportedly estimated the TDR consideration at ₹55.34 crore, which should have attracted GST under prevailing regulations. This understanding aligns with how GST impacts under-construction property prices and transactions involving land or development rights.

Additionally, compliance authorities have reportedly flagged irregularities with input tax credit entries during the 2022–23 financial year. This prompted them to escalate the matter to the national GST enforcement agency for further investigation, sources indicated. The case underscores ongoing debates around GST on leasehold land transfers and development rights in India's real estate sector.

Implications for Developers and Homebuyers

This development reportedly highlights that GST obligations on TDR transfers remain a critical compliance checkpoint for developers — even in affordable housing projects under government schemes. Non-payment could potentially lead to heavy penalties, reputational damage, and legal complications for developers involved in such projects.

For stakeholders exploring opportunities in Cuttack real estate investment, this case signals renewed regulatory scrutiny of projects utilising TDR mechanisms. It serves as a reminder to ensure that all statutory dues — including GST on non-traditional transactions like development rights transfers — are settled before sales or title transfers are finalised.

Homebuyers are advised to understand GST on property in India thoroughly before making purchase decisions, particularly in projects involving complex land arrangements. Additionally, understanding RERA homebuyer rights and developer obligations can help buyers navigate such situations more effectively.

Key Takeaways for Real Estate Stakeholders

Industry observers note that developers working on PMAY Urban 2.0 and affordable housing projects must maintain meticulous compliance records across all tax obligations. The evolving TDR policy landscape continues to pose challenges for developers navigating complex regulatory requirements.

For those considering property purchases in Odisha, the IGR Odisha portal for stamp duty and registration can help verify documentation and ensure transparency in property transactions.

Disclaimer: This news article is for informational purposes only and does not constitute legal, financial, or investment advice. Readers are advised to verify facts independently and consult qualified professionals before making any decisions related to real estate transactions, taxation, or legal compliance. The information presented is based on available reports and may be subject to change as the investigation progresses.