NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has issued guidelines for refund of excess Goods and Services Tax (GST) collected from homebuyers in registered real estate projects.
The authority said GST in all projects registered with UP-RERA should be collected strictly as per the rates notified by the central government.
UP-RERA said it had earlier issued an office order on January 8, 2025, communicating applicable GST rates to registered promoters and real estate agents. However, the authority has received information that in some cases, allottees were charged GST at rates higher than those prescribed.
The authority said the State Tax Department has put in place an online mechanism to allow eligible homebuyers to claim refund where excess GST has been collected.
Under the mechanism, if an allottee has paid GST while purchasing a flat or availing construction services, but the project is later cancelled, the agreement is terminated or the allotment is cancelled after the statutory time limit for issuing a credit note by the promoter has expired, the allottee can claim refund directly from the GST department.
An unregistered allottee will first have to obtain temporary registration on the GST portal using his or her Permanent Account Number. The refund application can then be submitted in FORM GST RFD-01 under the category “Refund for Unregistered Person”, along with proof of tax payment, supporting documents and the certificate issued by the promoter.
The refund claim will be processed by the competent authority after verification of the application and supporting documents, subject to eligibility under GST provisions.
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 will have to issue the credit note and refund the amount, including GST, to the allottee.
Only where the time limit for issuing a credit note has expired will the allottee be required to file the refund application independently.
The department has also said such refund claims can be filed within two years from the date of cancellation or termination of the agreement. Refund claims involving GST amount of less than ₹1,000 will not be admissible.
UP-RERA has directed all registered promoters to ensure compliance with notified GST rates and not collect GST at a rate higher than prescribed under applicable notifications.
The authority said wherever excess GST has been collected from an allottee, necessary action should be taken to ensure refund of the excess amount in accordance with applicable provisions and guidelines issued by the State Tax Department.
UP-RERA said the directions issued to promoters and real estate agents are available under the circular section on its web portal, along with circulars issued by the GST department.
