The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued fresh guidelines aimed at protecting homebuyers and ensuring compliance with Goods and Services Tax (GST) regulations in the real estate sector. The authority has directed all registered promoters and developers to strictly adhere to GST rates notified by the Central Government and has clarified the procedure for refunding excess GST collected from homebuyers.
The move comes after UP RERA received information indicating that in certain real estate projects, allottees were charged GST at rates higher than those prescribed under applicable government notifications. To address these concerns, the authority coordinated with the State Tax Department to establish a clear mechanism for obtaining refunds of excess GST payments.
According to the guidelines, if a homebuyer has paid GST while purchasing a flat or availing construction services and the project is subsequently cancelled, the agreement terminated, or the allotment revoked after the statutory period for issuance of a credit note by the promoter has expired, the allottee may seek a refund directly from the GST Department.
For such claims, unregistered allottees must obtain temporary registration on the GST portal using their Permanent Account Number (PAN). Thereafter, they may file an application through 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 GST Department will process refund applications after verifying eligibility and supporting documentation in accordance with GST laws. However, where the statutory period for issuing a credit note remains available, the promoter is obligated to issue the credit note and refund the entire amount, including GST, directly to the allottee.
UP RERA has clarified that refund applications must be filed within two years from the date of cancellation or termination of the agreement. Claims involving GST amounts below ₹1,000 will not be entertained.
Reiterating its commitment to consumer protection and transparency, UP RERA directed promoters to ensure strict compliance with applicable GST rates and prohibited the collection of GST beyond prescribed limits. The authority further stated that wherever excess GST has been collected, appropriate steps must be taken to refund the excess amount in accordance with applicable legal provisions and guidelines issued by the State Tax Department.
The guidelines are expected to strengthen accountability within the real estate sector, improve GST compliance among developers, and provide homebuyers with an effective mechanism for recovering excess tax payments.