New GST regime may hurt builders, says expert

New GST regime may hurt builders, says expert

Real estate developers have to pay more taxes under Goods and Services Tax (GST) for residential projects, if they source a bulk of their inputs (like cement and capital goods) from unregistered dealers. For residential projects started after April 1, 2019, the builder has to mandatorily charge customers a concessional rate of 5% or 1% (affordable residential apartments), as per the decision of the GST Council. For ongoing projects, they were given an option to choose between the old rate…

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Government to press the pedal for easier, simpler GST

Government to press the pedal for easier, simpler GST

With the launch of the Goods and Services Tax (GST) in July 1 2017, the government promised to create a common national market by dismantling fiscal barriers among states. Two years later, it is still looking to reach a steady state with multiple rate changes, procedural irritants, complex tax filing systems and a five-tier rate structure. With a massive mandate by its side, BJP’s new federal finance minister will have to move on not only hastening the process of simplifying…

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Builders opting for old GST rate face problems with buyers insisting on paying only 5% tax

Builders opting for old GST rate face problems with buyers insisting on paying only 5% tax

Builders are facing a piquant situation with homebuyers insisting that they will pay only the new rate of 5 per cent GST on flats even though the developer has opted for the old rate of 12 per cent to take advantage of credit on inputs like paints, cement and steel. As part of rationalisation of the Goods and Services Tax (GST) on real estate sector, the GST Council has allowed builders to migrate to 5 per cent rate for residential…

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GSTN releases prototype of a new simplified return filing system

GSTN releases prototype of a new simplified return filing system

GST Network on Wednesday released a demo tool for the new and simplified return filing form which will be launched sometime later in the year. The prototype available on webportal gives stakeholders a feel of what the new return filing system will look like. GSTN also sought stakeholder feedback on the proposed offline tool. It will allow users to use functionality such as drop down menus, invoice upload, upload of purchase register for matching with system created inward supplies. In…

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Finance commission may not extend GST compensation

Finance commission may not extend GST compensation

The 15th Finance Commission is unlikely to heed the request of state governments to extend the period for the goods and services tax (GST) compensation beyond the initial five years, holding that tax buoyancy will take care of the current shortfall in revenue in some states. “As GST is a consumption-based tax, the real problem with states is that the guaranteed compensation will end in two years from now, which covers two out of the five years of my award…

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Hotels, realtors move Delhi HC over Input Tax Credit issue

Hotels, realtors move Delhi HC over Input Tax Credit issue

Many hotels, malls and real estate companies that were denied input tax credit under Goods and Services Tax (GST) mechanism in certain situations have dragged the government to court over the issue. A writ petition was filed in the Delhi High Court on Monday, challenging a change in the GST framework this year, whereby input tax credits were denied to real estate companies, hotels and malls in cases where construction is undertaken by the company itself, people familiar with the…

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Most builders opt for 12% GST slab for ongoing projects

Most builders opt for 12% GST slab for ongoing projects

Most real estate developers across the State have opted for the old Goods and Services Tax (GST) rate of 12% for ongoing residential projects, as they feel the rate is more beneficial owing to the availability of input tax credit, allowing them to pass on the benefits to the consumers. Earlier this year, the GST Council had taken a decision that for all new projects launched after April 1, 2019, builders would charge 5% GST from buyers, but they cannot…

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High Court issues notice to Centre and Delhi govt on ‘blocked credits’ under GST

High Court issues notice to Centre and Delhi govt on ‘blocked credits’ under GST

The Delhi High Court on Monday issued a notice to the Centre and the Delhi government on the issue of ‘blocked credits’ under the Goods & Services Tax (GST) regime. Such a mechanism is affecting hotels and malls. The GST Act has a provision, under Section 16, for input tax credit (ITC), which helps businesses deduct the tax paid on inputs at the time of paying tax on output, thus lowering the tax paid in cash. However, this Section is…

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Relief for importers as Gujarat HC stays IGST levy on ocean freight

Relief for importers as Gujarat HC stays IGST levy on ocean freight

Importers can breathe easy as the Gujarat High Court has stayed the levy of Integrated Goods & Service Tax (IGST) on ocean freight. IGST is levied on all Inter-State supplies of goods and/or services. It is also applicable on any supply of goods and/or services in cases of import into and export from the country. Under the GST, there is specific provision with respect to taxability on the component of ocean freight. The law specifically provides that the importers are…

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GST Council may consider national bench of AAAR next month

GST Council may consider national bench of AAAR next month

The GST Council is likely to consider next month a proposal for setting up a national bench of the Appellate Authority for Advance Ruling (AAAR) to reconcile the contradictory orders on similar issues passed by AARs in different states, a move aimed at providing certainty to taxpayers. Sources said the revenue department is mulling on the idea of a national bench of AAAR since it feels that the Authority for Advance Ruling (AAR) mechanism in its current form is not…

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