NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has introduced new guidelines for refunding excess Goods and Services Tax (GST) collected from homebuyers in registered real estate projects.
UP-RERA emphasized that GST for all registered projects should be collected in accordance with the rates set by the central government.
Earlier, on January 8, 2025, UP-RERA had issued an order informing registered promoters and real estate agents about the applicable GST rates. However, concerns were raised that some allottees were charged GST rates above the prescribed ones.
To address this, the State Tax Department has implemented an online system that allows eligible homebuyers to claim refunds for any excess GST collected.
According to the new mechanism, if a buyer paid GST when purchasing a flat or for construction services, and the project is later canceled or the allotment is revoked after the deadline for issuing a credit note has passed, the buyer can claim a refund directly from the GST department.
An unregistered buyer must first obtain temporary registration on the GST portal using their Permanent Account Number. The refund application should be submitted in FORM GST RFD-01 under the “Refund for Unregistered Person” category, along with proof of tax payment, supporting documents, and a certificate from the promoter.
The competent authority will process the refund claim after verifying the application and supporting documents, ensuring eligibility under GST regulations.
The GST department clarified that if the statutory period for issuing a credit note is still available at the time of agreement cancellation or termination, the promoter must issue the credit note and refund the amount, including GST, to the buyer.
Only when the timeframe for issuing a credit note has lapsed will the buyer need to file the refund application independently.
Moreover, refund claims can be submitted within two years from the date of agreement cancellation or termination. Claims for GST amounts below ₹1,000 are not permissible.
UP-RERA has instructed all registered promoters to comply with the notified GST rates and refrain from charging higher rates than stipulated in applicable notifications.
Where excess GST has been collected, appropriate actions must be taken to ensure refunds as per applicable regulations and guidelines from the State Tax Department.
Details of the directives issued to promoters and real estate agents are available on UP-RERA’s website, along with relevant circulars from the GST department.
