The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued fresh guidelines to help homebuyers claim refunds of excess Goods and Services Tax (GST) collected by developers, while directing promoters to strictly comply with notified tax rates.The authority has directed all registered real estate promoters to strictly adhere to the GST rates notified by the Central government.In a recent statement, UP RERA said eligible homebuyers who were charged GST in excess of the prescribed rates would be able to claim refunds through the GST department’s online mechanism. “GST in all projects registered with UP RERA should be collected only at the rates notified by the Central government.” It added that the applicable rates had already been communicated to all registered promoters and real estate agents through a circular issued on January 8, 2025.Despite these directions, the authority acknowledged that cases had come to its notice where GST had been collected from allottees at rates higher than those prescribed. To safeguard the interests of homebuyers, UP RERA said it had coordinated with the State Tax Department to clarify the mechanism for refund of excess GST.
Procedure when project is cancelled
According to the procedure laid out, if a homebuyer has paid GST while purchasing a flat or availing construction services, but the project is cancelled, the agreement terminated, or the 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.For this, an unregistered allottee will have to 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. The refund will then be processed after verification by the competent authority under GST provisions.
Role of the promoter within the statutory period
UP RERA said that 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 said refund claims must be filed within two years from the date of cancellation or termination of the agreement. It also clarified that claims involving GST below Rs 1,000 would not be entertained.Directing promoters to ensure strict compliance, UP RERA said they should fully adhere to the notified GST rates and under no circumstances collect GST in excess of the prescribed rates. It added 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 the guidelines issued by the State Tax Department.