With the Goods and Services Tax (GST) on under-construction and affordable properties set to get reduced effective April 1, 2019, any unutilised Input Tax Credit (ITC) lying with the builders as on March 31, 2019, will be reversed. While homebuyers purchasing an under-construction property from April 1, 2019, would be able to reap the benefit of slashed GST, the ITC on such properties will lapse.
The ITC reversal will take place through GSTR-3B, which is a monthly return to be filed regularly by all taxpayers until March 2019. According to a Central Board of Indirect Taxes and Customs official, the government is considering two-three models for computing the ITC.
Bimal Jain, Chairman, PHD Chamber of Commerce and Industry’s (PHDCCI’s) Indirect Tax committee has opposed the reversal of ITC stating that the benefit of slashing GST will only accrue when the government reduces the same on cement, steel other raw materials. He even added that the ITC as on April 1, 2019, should not stand lapse and return credit be granted for utilisation with other tax liabilities.
Industry stakeholders are also against the government’s decision to take back any unused credit before April 1, 2019, on under-construction properties that are not sold.
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