In a recent development, the Goods and Services Tax (GST) Council is expected to issue a clarification regarding the exemption of the Real Estate Regulatory Authority (RERA) from GST payments, according to a report by PTI.
An official stated that discussions with RERA functionaries revealed that GST is not applicable to them, emphasizing that RERAs are funded by respective state governments. Imposing GST on RERAs would essentially mean taxing state governments.
RERA, established in various states, plays a crucial role in ensuring transparency in real estate projects, safeguarding consumer interests, and providing a mechanism for swift dispute resolution.
The Executive Director of Moore Singhi, Rajat Mohan, highlighted the potential impact of this clarification, drawing parallels with the pre-July 2022 scenario when certain services offered by regulatory bodies like RBI, SEBI, and IRDA were exempt from GST. Mohan noted that excluding RERA authorities from GST considerations could lead to reduced expenses for both developers and homebuyers, especially considering that Input Tax Credit (ITC) is not permissible in the residential real estate sector.
A meeting of the GST Council, chaired by the Union Finance Minister, is anticipated before the imposition of the Model Code of Conduct for the upcoming general election scheduled for April-May. The last council meeting was held on October 7, 2023.
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