The GST Council is poised to clarify that the Real Estate Regulatory Authority (RERA) will not be required to pay Goods and Services Tax (GST), according to an official.
RERA, responsible for overseeing and facilitating the realty sector, falls under Article 243G of the Constitution. Its objectives include ensuring transparency in real estate projects, safeguarding consumer interests, and establishing a mechanism for expeditious dispute resolution.
Following discussions on RERA’s functions, it was determined that GST does not apply to them. Since RERAs are funded by respective state governments, imposing GST would essentially tax state governments.
A meeting of the GST Council, chaired by the Union Finance Minister and including state ministers, is expected to take place before the implementation of the Model Code of Conduct for the upcoming general elections in April-May.
Prior to July 18, 2022, certain services provided by key regulatory bodies in India were exempt from GST. This exemption was lifted on July 18, 2022, sparking discussions about the tax implications for RERA bodies.
In the residential real estate sector, Input Tax Credit (ITC) is not permissible, meaning that excluding RERA authorities from GST considerations could potentially reduce expenses for both developers and homebuyers. Therefore, a clarification from the GST Council on this matter would be highly beneficial for the sector.
(Credits: Et Realty)
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