Double Whammy: Realtors’ GST burden to rise

Double Whammy: Realtors’ GST burden to rise

Real estate companies face a double whammy following the lockdown. Not only did work come to a halt, builders will now have to pay a higher rate of goods and services tax if they haven’t bought at least 80% of the construction material from registered dealers.

The Central Board of Indirect Taxes and Customs (CBIC) has mandated the payment of 18% GST if procurement of materials from registered dealers falls short of the threshold. CBIC field offices have been asked to inform the trade that the tax for the financial year ended March must be paid before June 30. The requisite forms have been issued as well.

“CBIC has cleared its stand that there will be no Covid extension for any taxpayer in the real estate sector for tax payments due to procurements from unregistered persons below an 80% threshold,” said Rajat Mohan, senior partner at AMRG Associates.