The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued a directive to all registered real estate project promoters requiring them to refund any excess Goods and Services Tax (GST) collected from homebuyers over and above the applicable rates. According to the latest statement issued on Monday, UP RERA said cases have come to notice where GST has been collected from allottees at rates higher than those prescribed despite previous directions. The regulator has now coordinated with the State Tax Department to clarify the mechanism for refund of excess GST to safeguard homebuyer interests. As reported by PTI, UP RERA has directed all registered promoters to strictly adhere to GST rate notifications and ensure full compliance with regulatory requirements.
As reported by ETRealty, UP RERA clarified that GST in all projects registered with UP RERA should be collected strictly as per the rates notified by the central government. The authority had previously issued an office order on January 8, 2025, communicating applicable GST rates to registered promoters and real estate agents. The authority emphasized that developers must collect GST at rates prescribed by the Central government to ensure homebuyers are not burdened with tax beyond legally prescribed rates, directing promoters to "fully adhere to the notified GST rates and under no circumstances collect GST in excess of the prescribed rates." According to PTI, the applicable rates have already been communicated to all registered promoters and real estate agents through this circular.
According to the UP RERA circular reported by ETRealty, eligible homebuyers who were charged GST in excess of prescribed rates can claim refunds through the State Tax Department's online mechanism. The authority stated that refund claims must be filed within two years from the date of cancellation or termination of the agreement. Importantly, claims involving GST amounts below ₹1,000 will not be entertained, as clarified in the regulatory directive. The refund will be processed after verification by the competent authority under GST provisions. As detailed by PTI, UP RERA has facilitated this process to ensure homebuyers receive their rightful refunds without unnecessary delays.
As detailed in the UP RERA circular reported by ETRealty, when a homebuyer has paid GST while purchasing a flat or availing construction services but the project is cancelled, terminated or allotment revoked after the statutory time limit for issuance of a credit note by the promoter has expired, the allottee can directly seek a refund from the GST department. An unregistered allottee must obtain temporary registration on the GST portal using a Permanent Account Number (PAN) and submit an application in 'Form GST RFD-01' under the category 'Refund for Unregistered Person', along with proof of tax payment, supporting documents and a certificate issued by the promoter. According to PTI, this procedure ensures that eligible homebuyers can access their refunds directly without requiring promoters to issue credit notes where statutory periods have expired.
According to the UP RERA directive reported by ETRealty, where the statutory period for issuing a credit note is still available, the promoter himself shall issue the credit note or refund the entire amount, including GST, to the allottee. Only where the statutory period has expired would the allottee be required to approach the GST department directly. The authority emphasized that "wherever excess GST has been collected from an allottee, necessary action shall be taken to ensure refund of the excess amount" in accordance with applicable legal provisions and guidelines issued by the State Tax Department. UP RERA has directed all registered promoters to strictly adhere to GST rate notifications and ensure full compliance with regulatory requirements, with the authority warning builders against excess GST levy to protect homebuyer interests.
