Ministry of Finance has received many complaints about builders not providing benefit of tax credit to the home buyers. According to the Ministry of Finance complains so received were handed over to National Anti-profiteering Agency (NAA) for further action. Also, through press releases and advertisement, the government has been sensitizing that builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of the flats, complexes etc. by way of reduction of prices/instalments.
It should be noted that section 171 (1) of the CGST Act, 2017 mandates that reduction in tax rate on any goods or services or the benefit of input tax credit, shall be passed on to the recipient by way of commensurate reduction in prices. This provision is being enforced in accordance with section 171 (2) and (3) of the CGST Act, 2017.
It may be recalled here that the GST Council in pursuance of the decision of the 32nd GST Council meeting, has constituted a Group of Ministers (GoM) for boosting the real estate sector under GST regime. Deputy Chief Minister of Gujarat is the Convener of the GoM and Finance Ministers of the Government of Maharashtra, Kerala, Karnataka, Uttar Pradesh, Goa and Punjab are its members. One of its terms of reference of the GoM is to analyze the tax rate of GST, including inter-alia issues/challenges in view of proposal for boosting real estate sector under GST regime by providing a composition scheme for residential construction units