The Central Board of Indirect Taxes and Customs ( CBIC ) on Wednesday issued instructions regarding the payment of GST by real estate promoter/developer supplying construction of residential apartments etc, shall use the form DRC-03 to pay the tax electronically on the common portal by June 30, 2020, on the shortfall value from the said threshold from 80% to pay the tax electronically.
A revised GST rate has been prescribed vide Notification no. 11/2017- Central Tax (Rate) dated June 28, 2017, as amended by Notification no. 3/2019- Central Tax (Rate) dated March 29, 2019, with effect from April 1, 2019, on the supply of service by way of construction of residential apartments. Under this, construction of affordable residential apartments attract GST at the rate of 1% (without ITC) and other residential apartments attract GST at the rate of 5% (without ITC).
One of the condition prescribed vide said notification is that at least 80% of the value of input and input services, other than services by way of grant of development rights, long term lease of land or FSI, electricity, high-speed diesel, motor spirit, natural gas, used in supplying the construction service, shall be received by the promoter/developer from registered supplier only.
In case of the shortfall from the threshold of 80%., the promoter/developer shall pay the tax on the value of input and input services comprising such shortfall in the manner as has been prescribed in the notification. This tax shall be paid through a prescribed form electronically on the common portal by end of the quarter following the financial year. Accordingly, for Financial Year 2019-20, tax on such shortfall is to be paid by the 30th of June 2020.
“The issue referred to by the trade has been examined. It has been decided that FORM GST DRC-03, as already prescribed, shall be used for making the payment of such tax by promoter/developer. Accordingly, a person required to pay tax in accordance with the said notification on the shortfall from threshold requirement of procuring input and input services (below 80%) from the registered person shall use the form DRC-03 to pay the tax electronically on the common portal within the prescribed period,” the instruction clarified.
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