In a move that would impact investments into tourism and leisure-related real estate across Maharashtra, the Bombay High Court has paused recoveries tied to a key policy exemption. The ruling offers interim relief to the operator of a water park, whose tax exemption under the 2006 Tourism Incentive Policy was recently revoked by state authorities.
At the heart of the dispute lies the definition of a water park, a classification that determines eligibility for entertainment duty exemptions.
The Division Bench of Justices Manish Pitale and Y.G. Khobragade stayed the Collector’s order dated April 29, 2025, which had directed recovery proceedings. The outcome of this case could shape how tourism-linked real estate incentives are interpreted and applied under existing state policies.
The petition was filed by Giriraj Enterprises, which operates the water park at Shirdi in Maharashtra. The Collector’s order had sought recovery of Rs 5.77 crore, along with penalties, as arrears of land revenue. The order followed an audit objection raised by the Accountant General, which held that the project was not eligible for the entertainment duty exemption.
Appearing on behalf of the petitioner, Abhishek A Rastogi of Rastogi Chambers, submitted that the project had received an eligibility certificate from the Maharashtra Tourism Development Corporation (MTDC) in 2010. The certificate, valid until June 2025, identified the project as a water park and entitled it to an entertainment duty exemption, subject to a monetary ceiling.
According to him, the petitioner had complied with the policy framework and that the retrospective withdrawal of the benefit created uncertainty for investors.
The court noted that the eligibility certificate had remained unchallenged on its merits for over a decade and was being questioned only after the audit objection.
It further observed that there had been no assessment under Section 4B of the Maharashtra Entertainment Duty Act to determine whether the monetary exemption cap had been exceeded.
The court held that the Collector’s order did not constitute an order under Section 4B which meant that the appellate remedy under Section 10A was not available. Accordingly, it allowed the writ petition to be entertained.
According to industry observers, the government-backed incentives are factored into financial models for tourism-related developments such as resorts, amusement parks, and integrated townships. Uncertainty around the interpretation of project classifications could influence investment decisions in this segment.
Rastogi stated that tourism-focused real estate projects depend on long-term policy continuity. According to him, the withdrawal of incentives after the issuance of statutory certificates may affect developer confidence and investment flows.
The next hearing is scheduled for August 26. Stakeholders in tourism and real estate are expected to track the proceedings given the potential implications for policy enforcement.
At the heart of the dispute lies the definition of a water park, a classification that determines eligibility for entertainment duty exemptions.
The Division Bench of Justices Manish Pitale and Y.G. Khobragade stayed the Collector’s order dated April 29, 2025, which had directed recovery proceedings. The outcome of this case could shape how tourism-linked real estate incentives are interpreted and applied under existing state policies.
The petition was filed by Giriraj Enterprises, which operates the water park at Shirdi in Maharashtra. The Collector’s order had sought recovery of Rs 5.77 crore, along with penalties, as arrears of land revenue. The order followed an audit objection raised by the Accountant General, which held that the project was not eligible for the entertainment duty exemption.
Appearing on behalf of the petitioner, Abhishek A Rastogi of Rastogi Chambers, submitted that the project had received an eligibility certificate from the Maharashtra Tourism Development Corporation (MTDC) in 2010. The certificate, valid until June 2025, identified the project as a water park and entitled it to an entertainment duty exemption, subject to a monetary ceiling.
According to him, the petitioner had complied with the policy framework and that the retrospective withdrawal of the benefit created uncertainty for investors.
The court noted that the eligibility certificate had remained unchallenged on its merits for over a decade and was being questioned only after the audit objection.
It further observed that there had been no assessment under Section 4B of the Maharashtra Entertainment Duty Act to determine whether the monetary exemption cap had been exceeded.
The court held that the Collector’s order did not constitute an order under Section 4B which meant that the appellate remedy under Section 10A was not available. Accordingly, it allowed the writ petition to be entertained.
According to industry observers, the government-backed incentives are factored into financial models for tourism-related developments such as resorts, amusement parks, and integrated townships. Uncertainty around the interpretation of project classifications could influence investment decisions in this segment.
Rastogi stated that tourism-focused real estate projects depend on long-term policy continuity. According to him, the withdrawal of incentives after the issuance of statutory certificates may affect developer confidence and investment flows.
The next hearing is scheduled for August 26. Stakeholders in tourism and real estate are expected to track the proceedings given the potential implications for policy enforcement.
