Notification No. 10/2019 - Central Tax (Rate) Explained

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Notification No. 10/2019 - Central Tax (Rate): To amend notification No. 11/ 2017- Central Tax (Rate) so as to extend the last date for exercising the option by promoters to pay tax at the old rates of 12%/ 8% with ITC

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R......(E).- In exercise of the powers conferred by sub-sections (1), (3)and (4) of section 9, sub-section (1) of section 11,sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do,

Hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.11/2017- Central Tax (Rate), dated the 28^thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28^thJune, 2017, namely:-

In the said notification, -

in the Table, against serial number 3, in items (ie) and (if), in the entries in column (5), for the figures and letters “10^th ”, wherever they occur, the figures and letters “20^th ” shall be substituted;

in Annexure IV, for the figures and letters “10^th ”, at both the places where they occur, the figures and letters “20^th” shall be substituted.

(Ruchi Bisht)
Under Secretary to the
Government of India

Note: - The principal notification No. 11/2017 - Central Tax(Rate), dated the 28^thJune, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 690 (E), dated the 28^th June, 2017 and was last amended by notification No.3/2019-Central Tax (Rate), dated the 29^th March, 2019, published vide number G.S.R. 250(E), dated the 29^th March, 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 10/2019 - Central Tax (Rate)

Q1: What is Notification No. 10/2019 – Central Tax (Rate)?

Answer:
Notification No. 10/2019 – Central Tax (Rate) amends Notification No. 11/2017 to extend the deadline for real estate promoters to exercise the option to pay GST at old rates of 12%/8% with ITC instead of the new rates without ITC.

Q2: From which date is Notification No. 10/2019 applicable?

Answer:
The notification was issued on 10 May 2019 and applies from that date.

Q3: What are the “old GST rates” referred to in this notification?

Answer:
The old GST rates for real estate projects are:
12% with ITC – Non-affordable residential projects
8% with ITC – Affordable housing projects

Q4: What were the new GST rates introduced from 1 April 2019?

Answer:
From 1 April 2019, new rates were introduced:
5% (non-affordable housing) – without ITC
1% (affordable housing) – without ITC
Promoters had to choose between old rates with ITC or new rates without ITC.

Q5: What deadline was extended by Notification No. 10/2019?

Answer:
The last date to exercise the option to continue under old GST rates was extended from 10th to 20th, giving promoters more time to make an informed decision.

Q6: Who is eligible to exercise this option?

Answer:
The option is available to real estate promoters who:
Had ongoing projects as on 1 April 2019, and
Wanted to continue paying GST under the old rate structure with ITC.

Q7: Why was this extension necessary?

Answer:
The real estate GST changes were complex and had significant financial impact. The extension allowed promoters to:
Analyse ITC balances
Review project cash flows
Consult tax professionals

Q8: How does this option affect Input Tax Credit (ITC)?

Answer:
Old rates (12%/8%) → ITC allowed
New rates (5%/1%) → ITC not allowed
Choosing the wrong option can materially affect project profitability.

Q9: Is the option reversible once exercised?

Answer:
No ❌. Once the option is exercised, it is generally irreversible for that project, making timely and correct choice essential.

Q10: How should promoters exercise this option?

Answer:
The option must be exercised in the prescribed manner, as specified in Annexure IV to Notification No. 11/2017, within the extended time limit.

Q11: What happens if the option is not exercised within the extended date?

Answer:
If no option is exercised:
The promoter is deemed to have opted for the new GST rates, and
ITC will not be available.

Q12: Does this notification apply to new projects launched after 1 April 2019?

Answer:
No ❌. New projects launched after 1 April 2019 are mandatorily taxable at new rates (5%/1%) without ITC.

Q13: How should GST returns reflect this option?

Answer:
Promoters must:
Apply the selected GST rate consistently
Report outward supplies correctly in GSTR-1
Disclose tax liability in GSTR-3B
👉 File accurate GST returns with Finodha:
🔗 https://finodha.in/gst-return-filing/

Q14: What are the risks of missing this deadline?

Answer:
Missing the deadline can lead to:
Loss of accumulated ITC
Higher project cost
Pricing and contract disputes

Q15: Who should carefully review Notification No. 10/2019?

Answer:
This notification is critical for:
Real estate developers
Builders with ongoing projects
Joint development agreement (JDA) projects
👉 Get expert real estate GST guidance from Finodha:
🔗 https://finodha.in/gst-compliance/

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