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Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

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GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-1

GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-1
The much awaited notifications with respect to GST Council’s decision as regards prescribing new GST rates for real estate sector being 1% without ITC for affordable residential housing and 5% without ITC for non-affordable residential housing have been released by the Government yesterday. The Government has issued around 14 notifications [CGST (Rate) and IGST (Rate)] making substantial changes in the GST rates applicable for real estate sector thereby giving “amendment bonanza” to the real estate sector on the beginning of new financial year. As we all know that the real estate sector is always surrounded by immense litigation and the substantial amendments made by the government increase their complexities thereby adding fuel to the fire of litigation that will be really difficult to extinguish. The present update seeks to highlight the key points of the new GST rates introduced by the government and the conditions stated therein.
  1. The notification removes the confusion as regards deduction of 1/3 rd value pertaining to portion of land as stated in paragraph no. 2 of the notification. It was pointed out in our earlier update that deduction in share of land is not being provided in the Press Release. However, the GST rates specified in the Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019 and Notification No. 03/2019-IGST (Rate) dated 29.03.2019 specifically mentions that the deduction stated in paragraph no. 2 of the notification would be applicable.
  2. A new procedural compliance has been introduced wherein the developers referred in the notification as ‘developer-promoter’ is required to ensure that 80% of the value of input and input services (other than services by way of grant of development rights, FSI, electricity, high speed diesel, motor spirit, natural gas) used in supplying the services should be received by the registered supplier. Earlier, there was confusion that if the limit of 80% is not adhered to, whether reverse charge mechanism would be applicable for all inputs/input services or only for the shortfall. This notification states that the developer is required to pay GST at the rate of 18% on all inputs/input services except cement and capital goods under reverse charge mechanism on the shortfall in the purchases made from registered supplier. With respect to cement and capital goods, the GST rates as applicable to the said goods would be relevant. It is also prescribed that the developer is required to ensure on monthly basis that the shortfall is being paid under reverse charge mechanism with respect to purchases of cement. As regards other inputs/input services, the developer is required to make good the shortfall of 80% on annual basis, latest by 30 June of the quarter ending the financial year. The tax payments on the shortfall are required to be reported by the developer in the prescribed form electronically on the common portal thereby leading to increased compliance. Not only this, the input tax credit not availed shall be reported every month as ineligible credit in GSTR-3B [Row No. 4(D)(2)].
  3. The developer has one time option to pay GST at the old rates of 12%/18% by filing Form at Annexure IV by 10th May, 2019 for the ongoing projects.
  4. This notification also seeks to clear the confusion as regards valuation of flats given by the developer to the landowner in lieu of transfer of development rights. It is stated that the value of such flats shall be the total amount charged for similar apartments in the project from independent buyers nearest to the date on which such development right is transferred to the promoter less the value of transfer of land if any as prescribed in paragraph 2 of the notification. It is worth noting that the provision allows deduction of value of land even if flats are given to landowner.
  5. This notification also seeks to clear the dispute as regards inclusion of the value of other charges charged by the developer such as preferential location charges, development charges, parking charges, common facility charges etc. and states that these charges would form part of the gross amount of consideration. This has the effect that GST will be payable on the said charges at the GST rate applicable to constructed flats sold by the developer.       
  6. The notification specifies that the credit of input tax charged on goods and services used in supplying the service should not been taken except to the extent as prescribed in Annexure I in case of Real Estate Project (REP) and in Annexure II in case of Residential Real Estate Project (RREP). The details of the Annexures will be discussed in our next update.
 This is solely for the educational purpose.
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