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GST Council to Unburden RERA! No GST Obligation on Real Estate Regulatory Authority

Find out about the projected relief from Goods and Services Tax (GST) for Real Estate Regulatory Authority (RERA), as the GST Council is scheduled to clarify during its next meeting.

GST: According to an official, the GST Council is expected to make it clear that the Real Estate Regulatory Authority (RERA) would not be obliged to pay the Goods and Services Tax (GST). The official claims that RERA, which serves as both a regulator and a facilitator for the real estate industry, is covered by Article 243G of the Constitution, which deals with the authority, responsibility, and powers of panchayats.

RERA’s Consumer Protection Role

RERA was established in several states to safeguard consumer interests, guarantee transparency in real estate projects, and create a dispute resolution process that would allow for prompt resolution of disputes. The official stated that it was determined that RERA employees are exempt from GST after conversations regarding the nature of their roles with them.

The source went on to say that since state governments support RERAS, charging GST would essentially be taxing those governments. Before the Model Code of Conduct for the general election, which is scheduled for April or May, a meeting of the GST Council, presided over by the Union Finance Minister and composed of state ministers, is probably going to take place.

Recent GST Council Meeting (October 7, 2023)

The GST Council’s most recent meeting took place on October 7, 2023. Prior to July 18, 2022, according to Moore Singhi Executive Director Rajat Mohan, a number of services provided by important Indian regulatory organisations were exempt from GST. These organisations included the Reserve Bank, the Securities Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority (IRDA), the Food Safety and Standards Authority of India (FSSAI), and the Goods and Services Tax (GST) network. On July 18, 2022, this exemption was removed, sparking debate over the tax ramifications for RERA organisations as well.

Residential Real Estate Sector

“Furthermore, in the residential real estate sector, Input Tax Credit (ITC) is not permissible, which means excluding RERA authorities from GST considerations could potentially reduce expenses for both developers and homebuyers. Consequently, a clarification from GST Council on this matter would be significantly beneficial for the sector,” Mohan added.

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