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Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

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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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