Important Keyword: Notification 07/2019 IGST, RCM on services real estate, IGST reverse charge promoter, GST real estate services RCM, IGST Act Section 5(4),
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[F. No. 354/32/2019- TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 29th March, 2019
Notification No. 07/2019 - Integrated Tax (Rate): Seeks to notify certain services to be taxed under RCM under section 5(4) of IGST Act as recommended by Goods and Services Tax Council for real estate sector.
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R......(E).- In exercise of the powers conferred by sub-section (4) of section 5 of the IGST Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies that the registered person specified in column (3) of the table below, shall in respect of supply of goods or services or both specified in column (2) of the Table below, received from an unregistered supplier shall pay tax on reverse charge basis as recipient of such goods or services or both, namely:-
Table
| Sl. No. | Category of supply of goods and services | Recipient of goods and services |
| (1) | (2) | (3) |
| 1 | Supply of such goods and services or both [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI)] which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project, in a financial year (or part of the financial year till the date of issuance of completion certificate or first occupation, whichever is earlier) as prescribed in notification No. 8/ 2017- Integrated Tax (Rate), dated 28th June, 2017, at items (i), (ia), (ib), (ic) and (id) against serial No. (3), published in Gazette of India vide G.S.R. No. 683 (E), dated 28th June, 2017, as amended. | Promoter. |
| 2 | Cement falling in chapter heading 2523 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975) which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project, in a financial year (or part of the financial year till the date of issuance of completion certificate or first occupation, whichever is earlier) as prescribed in notification No. 8/ 2017- Integrated Tax (Rate), dated 28th June, 2017, at items (i), (ia), (ib), (ic) and (id) against serial No. (3), published in Gazette of India vide G.S.R. No. 683 (E), dated 28th June, 2017, as amended. | Promoter. |
| 3 | Capital goods falling under any chapter in the first schedule to the Customs Tariff Act, 1975 (51 of 1975) supplied to a promoter for construction of a project on which tax is payable or paid at the rate prescribed for items (i), (ia), (ib), (ic) and (id) against serial number 3 in the Table, in notification No. 8/ 2017- Integrated Tax (Rate), dated 28th June, 2017, published in Gazette of India vide G.S.R. No. 683, dated 28th June, 2017, as amended. | Promoter. |
Explanation. - For the purpose of this notification, -
- the term “promoter” shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);
- “project” shall mean a Real Estate Project (REP) or a Residential Real Estate Project (RREP);
- the term “Real Estate Project (REP)” shall have the same meaning as assigned to it in in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);
- “Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP.
- “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to the size of the piece of land upon which it is built.
2. This notification shall come into force with effect from the 1st of April, 2019.
(Pramod Kumar)
Deputy Secretary to the
Government of India
📚 Frequently Asked Questions (FAQs): Notification No. 07/2019 - Integrated Tax (Rate)
Q1: What is Notification No. 07/2019 – Integrated Tax (Rate)?
Answer:
Notification No. 07/2019 – Integrated Tax (Rate) notifies certain services that are taxable under Reverse Charge Mechanism (RCM) when supplied by an unregistered person to a promoter for use in a real estate project.
Q2: From which date is Notification No. 07/2019 applicable?
Answer:
This notification is applicable from 1 April 2019, coinciding with the rollout of the new GST regime for real estate.
Q3: Which legal provision empowers this notification?
Answer:
The notification is issued under Section 5(4) of the IGST Act, 2017, which allows the Government to notify supplies where tax shall be paid by the recipient under RCM.
Q4: Who is treated as a “promoter” for this notification?
Answer:
The term “promoter” has the same meaning as assigned under the Real Estate (Regulation and Development) Act, 2016 (RERA) and includes builders, developers, and real estate project owners.
Q5: What types of projects are covered?
Answer:
The notification applies to:
Real Estate Projects (REP)
Residential Real Estate Projects (RREP)
RREP means a project where commercial carpet area does not exceed 15% of the total carpet area.
Q6: Which services are covered under RCM?
Answer:
The notification covers specified services supplied by an unregistered person to a promoter, such as:
Labour-related services
Site preparation services
Certain construction-related support services
These services must be used in the construction of REP or RREP.
Q7: Who is liable to pay IGST under this notification?
Answer:
The promoter (recipient of services) is liable to pay IGST under Reverse Charge Mechanism, not the supplier.
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Q8: At what rate is IGST payable under RCM?
Answer:
IGST is payable at the applicable rate prescribed for the service, as notified under IGST rate notifications, unless specifically exempted.
Q9: Does this apply if the service provider is registered?
Answer:
❌ No.
RCM under Notification No. 07/2019 applies only when services are supplied by an unregistered person.
Q10: Is Input Tax Credit (ITC) available on IGST paid under RCM?
Answer:
ITC availability depends on whether the promoter has opted for:
New GST rates (without ITC), or
Old GST rates (with ITC)
Proper evaluation is essential to avoid wrongful claims.
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🔗 https://finodha.in/gst-compliance/
Q11: How does this notification affect small service providers?
Answer:
Small, unregistered service providers:
Do not charge GST
Are relieved from GST compliance
The tax responsibility shifts entirely to the promoter
Q12: Is GST registration mandatory for promoters receiving such services?
Answer:
✅ Yes.
Promoters must be GST registered to discharge tax liability under RCM.
👉 Register easily with Finodha GST Registration Services
🔗 https://finodha.in/online-gst-registration/
Q13: What happens if IGST under RCM is not paid?
Answer:
Failure may lead to:
Interest under Section 50 of CGST Act
Penalties under Section 122
Litigation and GST notices
Q14: How should promoters report RCM liability?
Answer:
RCM liability must be:
Paid in cash
Reported in GSTR-3B
Properly recorded via self-invoice
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🔗 https://finodha.in/gst-compliance/
Q15: Why was this notification introduced specifically for real estate?
Answer:
The real estate sector had:
High use of unregistered vendors
Significant tax leakage risks
This notification ensures better compliance, transparency, and revenue protection.
✅ Conclusion & Call to Action
Notification No. 07/2019 – Integrated Tax (Rate) is a cornerstone provision under the revised GST framework for real estate. It clearly shifts IGST liability to promoters under RCM for specified services received from unregistered suppliers.
Download PDF: Notification No. 07/2019 - Integrated Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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