The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has directed real estate developers to follow prescribed GST rates. The State Tax Department has put in place an online mechanism to ensure that eligible homebuyers can claim a refund wherever a promoter has collected GST in excess of the prescribed rate.
UP RERA has stated that in all projects registered with the Authority, GST should be collected strictly in accordance with the rates notified by the Central Government. Information regarding the applicable GST rates has already been communicated to all registered promoters and real estate agents.
In this regard, UPRERA has earlier issued an office order on 8 January 2025, however, the Authority has received information indicating that in certain cases, allottees have been charged GST at rates higher than those prescribed. To provide relief in such cases, UPRERA has, in consultation with the State Tax Department, clarified the procedure for claiming a refund of excess GST paid by homebuyers.
Under this mechanism established by the GST department, if an allottee has paid GST while purchasing a flat or availing construction services, but subsequently the project is cancelled, the agreement is terminated, or the allotment is otherwise cancelled after the statutory time limit for issuance of a credit note by the promoter has expired, the allottee will be eligible to claim the GST refund directly from the GST department.
The GST department has clarified that where the statutory period for issuing a credit note is still available at the time of cancellation or termination of the agreement, the promoter shall issue the credit note and refund the amount, including GST, to the allottee.
Only in cases where the statutory time limit for issuing a credit note has expired will the allottee be required to file a refund application independently. The department has further informed in its circular that such refund claims may be filed within two years from the date of cancellation or termination of the agreement. However, refund claims involving a GST amount of less than Rs 1,000 shall not be admissible. UPRERA has directed all registered promoters to ensure strict compliance with the notified GST rates and not to collect GST at a rate higher than that prescribed under the applicable notifications under any circumstances. The Authority has further clarified that wherever excess GST has been collected from an allottee, necessary action shall be taken to ensure refund of the excess GST amount in accordance with the applicable provisions and the guidelines issued by the State Tax Department.
The Notification can be accessed at: Regarding Collection of Amount from Allottees at Rates Higher than the Applicable GST in RERA-Registered Projects
Source from: https://economictimes.indiatimes.com/industry/services/property-/-cstruction/up-rera-directs-real-estate-developers-to-charge-prescribed-gst-rates/articleshow/132366591.cms
