The Rajasthan High Court has taken up a significant challenge concerning the use of registration under the Real Estate (Regulation and Development) Act (RERA) as a determining factor for classifying a real estate project for GST purposes. 

The bench of Justice Arun Monga and Justice Maneesh Sharma, directed that the matter be posted on July 27, 2026. Significantly, the Bench also ordered issuance of notice regarding stay.

The petitioner has questioned the validity of Clause 30(a) of a CBIC Circular dated May 7, 2019, contending that it travels beyond the statutory framework of the Central Goods and Services Tax (CGST) Act and introduces an impermissible deeming fiction based on RERA registration.

Buy Now: 70+ Judgements Indirect Tax – July 2026 | E-Magazine

The central controversy before the High Court concerns Clause 30(a) of the Circular dated May 7, 2019. Senior counsel appearing for the petitioner argued that the clause goes beyond the statutory scheme contemplated under the CGST Act, particularly in light of the Ministry of Finance notification dated June 28, 2017, as subsequently amended.

The petitioner’s principal objection is that the impugned clause allegedly creates a deeming fiction under which the fact that a project is registered under RERA becomes, by itself, a determining factor for its GST classification.

According to the arguments recorded by the High Court, such an approach is impermissible because the classification of a project for GST purposes cannot allegedly be made dependent merely upon its registration under another statutory framework. The petitioner therefore contended that Clause 30(a) exceeds the scope of the parent GST legislation and the relevant statutory notification.

The Bench recorded the petitioner’s argument that the clause “introduces an impermissible deeming fiction” by envisaging registration of a project under RERA, per se, as a determining factor for GST classification.

The challenge assumes importance because the interpretation adopted under the impugned circular allegedly affected the petitioner’s entitlement to have its development treated as an “ongoing project.”

The petitioner maintained that it had a single integrated project which, according to it, ought to have validly qualified as an ongoing project. However, because of what it described as the erroneous premise flowing from the disputed clause, the project was denied that benefit.

The order specifically records the petitioner’s contention that, based on the allegedly wrong premise, its “single integrated project,” which otherwise ought to have qualified as an ongoing project, was denied the corresponding benefit.

Thus, the dispute raises a broader legal question regarding whether an executive circular can prescribe a classification criterion that is allegedly not contemplated by the CGST Act or the relevant notification, particularly by tying GST treatment to the manner in which a real estate development is registered under RERA.

At the heart of the challenge is the relationship between RERA registration and GST classification.

The petitioner’s case, as recorded at this preliminary stage, is that registration of a project under RERA cannot per sedetermine how that project should be characterised under the GST regime. Its contention essentially questions whether an administrative circular can use a regulatory event under RERA to create consequences for classification under GST when such a criterion is allegedly absent from the governing statutory scheme.

The case consequently places the validity and scope of Clause 30(a) under judicial scrutiny and may require the Court to examine whether the circular merely clarifies the statutory provisions or effectively adds a new condition to them.

Importantly, the July 10 order is a preliminary order and does not record any final adjudication on the validity of Clause 30(a). The arguments regarding the clause being ultra vires or constituting an impermissible deeming fiction are the petitioner’s submissions at this stage.

During the proceedings, advocates representing the concerned respondents entered appearance on advance service. The High Court consequently dispensed with further service.

The order records that Vedant Agarwal appeared for respondent Nos. 1 to 5, Praveer Sharma appeared for respondent No. 6, while Mahi Yadav, Additional Advocate General, appeared for respondent No. 7.

On behalf of the respondents, a short accommodation was sought to obtain instructions and file the contrary/reply. The Court accepted the request and fixed the matter for further consideration on July 27, 2026.

Apart from listing the case for further hearing, the Division Bench expressly directed “Notice regarding stay as well.”

The direction is significant because the petitioner has challenged a provision of the 2019 circular that allegedly resulted in denial of the benefit available to its project as an ongoing project.

However, the order does not record that the operation of Clause 30(a) has itself been stayed. Rather, the Court has issued notice regarding the prayer for stay, meaning the interim-relief question remains for consideration.

The proceedings could have wider implications for real estate developers whose GST treatment depends upon whether their projects satisfy the requirements applicable to an “ongoing project.”

More fundamentally, the challenge raises the recurring issue of the limits of executive circulars under taxation statutes. The petitioner is effectively asking the High Court to examine whether CBIC, through a circular, can prescribe RERA registration as a decisive factor for GST classification when, according to the petitioner, the CGST statutory framework and the relevant notification do not authorise such a criterion.

The eventual decision may therefore clarify the extent to which RERA registration can influence GST classification of real estate projects and whether Clause 30(a) of the May 7, 2019 circular remains within the permissible boundaries of the CGST Act and the relevant notifications.

For now, the Rajasthan High Court has kept the issue open, granted the respondents time to obtain instructions and respond, and issued notice on the question of interim stay. The substantive validity of the challenged clause and the petitioner’s claim that its integrated development should qualify as an ongoing project remain to be adjudicated.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: CESTAT Upholds Customs Duty Demand Against Telecom Importers