GST Council Clarifies Tax Exemption for Real Estate Regulatory Authority (RERA)

GST Council Clarifies Tax Exemption for Real Estate Regulatory Authority (RERA)

An official revealed that the GST Council had planned to clarify that the Real Estate Regulatory Authority (RERA) wouldn’t need to pay Goods and Services Tax (GST).

The official elaborated that RERA, tasked with regulating and facilitating the real estate sector, fell under the purview of Article 243G of the Constitution, governing the powers and responsibilities of panchayats.

Established across various states, RERA aimed to enhance transparency in real estate projects, safeguard consumer interests, and provide a mechanism for swift dispute resolution.

After consulting with RERA officials regarding their operational scope, it was concluded that GST wouldn’t apply to them.

Moreover, since RERAs were funded by state governments, imposing GST would essentially amount to taxing these governments.

A GST Council meeting, chaired by the Union Finance Minister and including state ministers, was expected to convene before the enforcement of the Model Code of Conduct for the upcoming general election scheduled for April-May.

The most recent GST Council session had taken place on October 7, 2023.

Prior to July 18, 2022, several key regulatory bodies in India, such as the Reserve Bank, Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Food Safety and Standards Authority of India (FSSAI), and the Goods and Services Tax (GST) network, had been exempt from GST.

This exemption was revoked on July 18, 2022, sparking debates about the tax implications for RERA entities.

An expert noted that in the residential real estate sector, Input Tax Credit (ITC) wasn’t permissible, suggesting that excluding RERA authorities from GST considerations could potentially lower expenses for developers and homebuyers. Therefore, a clarification from the GST Council on this issue would greatly benefit the sector.

Liked the post? Share this:
editor
editor@nyca.in
No Comments

Post A Comment

Disclaimer

We have taken all steps to ensure that the information on the website has been obtained from reliable sources and is accurate. However, this website is not intended to give legal, tax, accounting or other professional guidance. We recommend appropriate advice be taken prior to initiating action on specific issues.