It will be having huge impact of the increased rate of Jantri in Gujarat on the real estate sector and the broader economy. Jantri is a government-mandated rate used for determining the value of real estate assets and is used to calculate stamp duty and registration fees for property transactions. The increase in Jantri will lead to an increase in transaction costs, which could potentially impact the affordability of real estate for the public. The article concludes by highlighting the key points for home buyer and developer regarding GST applicability in under construction residential apartment.
RESIDENTIAL PROJECT IN GST:
“Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP.
“Residential apartment” shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority.
Meaning there by if in any project there is not more than 15% of the total carpet area is allocated as commercial that will be still considered as residential projects only.
EXISTING GST RATE FOR UNDER CONSTRUCTION RESIDENTIAL APARTMENT:
Construction of affordable residential apartments by a promoter in a Real Estate Project which commences on or after 1st April, 2019 will be taxed at the rate of 1%.
Construction of residential apartments other than affordable by a promoter in a Real Estate Project which commences on or after 1st April, 2019 will be taxed at the rate of 5%.
READY TO MOVE IN FLAT:
GST is not applicable in case of sale of the complex / building and ready to move-in flats where the sale has taken place after the issue of completion certificate by the competent authority; GST is applicable only in case of sale of ready to move-in flats only and only where the completion certificate has not been issued at the time of sale.
MEANING OF AFFORDABLE HOUSES:
“Affordable residential apartment” shall mean a residential apartment having carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities and for which the gross amount charged is not more than forty-five lakhs rupees.
Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR) with their respective geographical limits prescribed by an order issued by the Central or State Government in this regard.
CONDITION FOR DEVELOPER:
- GST must be discharged by debiting the electronic cash ledger only.
- 80% of value of input and input services, [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only.
- Tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of 18% on reverse charge basis.
- where cement is received from an unregistered person, the promoter shall pay tax on supply of such cement at the applicable rates on reverse charge basis.
- Input Tax Credit not availed shall be reported every month by reporting the same as ineligible credit in GSTR-3B [Row No. 4 (D)(2)].
REFUND ON CANCELLATION:
Manner of filing an application for refund by unregistered person (Circular 188/20/2022-GST)
- In the cases of premature cancellation of long-term service contract where the supplier is not in a position to issue credit note in terms of the provisions of Section 34(2) of the CGST Act i,e, Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than [ 30th November] following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier , the recipient (i.e., unregistered person refund) shall be entitled to claim refund in FORM GST RFD-01 under the category ‘Refund for unregistered person’.,
- The unregistered person would be required to obtain temporary registration before filing the above refund application through the GSTN portal.
- The refund amount claimed should not exceed the total amount of tax declared by the supplier on the invoices (against which refund is being claimed) issued by him.
- Separate refund applications will be filed in respect of invoices issued by different suppliers.
- Time period of two years from the relevant date has been specified for filing an application of refund. Accordingly, in the cases, where the refund claim is being made by the unregistered person (i.e., the recipient), the relevant date will be the date of issuance of letter of cancellation of the contract/ agreement for subject supply by the supplier as the said date will be considered as the date of receipt of the services by the unregistered person (i.e., the recipient.
- No refund shall be claimed by unregistered person if the amount is less than one thousand rupees.
Disclaimer: This Article is only a knowledge sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc if any.
