The GST Council is expected to provide clarity regarding the refund of accumulated Input Tax Credit (ITC), from the date of issuing the notification, for the construction of civil structures such as bridges and roads that are not intended for sale to buyers, as per a senior government official.
The official mentioned that the clarification would be issued prospectively, ensuring that no demands are raised for the previous period, taking the departure from the previous stand where the retrospective notices were sent to the online gaming sector.
During the previous 52nd GST Council meeting, the topic of refunding accumulated ITC for civil structures like bridges, roads, etc. was discussed. While refunds were ruled out for real estate that is sold, there is no intention to revisit previous cases. The next meeting will address this matter by providing the necessary clarification, said the official.
Stakeholders have sought clarification on the refunding of the accumulated ITC for bridges and roads, as different states have taken different stands on the issue.
The Council intends to clarify that the refund of accumulated Input Tax Credit (ITC) under GST will be implemented in a forward-looking manner taking into account the disparity among states regarding the refund of ITC for civil structures such as bridges and roads, with some states granting refunds while others do not.
Except for the members from the state of Karnataka, the GST law committee members have expressed the view that civil structures meant for sale, along with the associated land or undivided share of land (e.g., your share of the land when you buy a flat), will not be eligible for a refund of accumulated ITC.
In the real estate industry, Goods and Services Tax (GST) is imposed on the labour and materials involved in the construction of a building. However, there is no GST applicable to the sale of a finished building or apartment.