Amendments to IGST Act: Taxation on Real Estate Transactions

New amendments under section 6 of the IGST Act, 2017, significantly impact real estate transactions, aiming for clarity and regulation.

Notification No.9/2017- Integrated Tax (Rate) is revised, specifying conditions for tax exemptions related to transfer of development rights (TDR) and Floor Space Index (FSI) for residential project construction.

Exemptions apply only when entire consideration is received after project completion or first occupation, not after issuance of the completion certificate. Calculation of GST exemption based on carpet area of residential apartments in the project, ensuring proportional taxation.

Reverse charge mechanism applies if residential apartments remain unbooked, with a capped tax liability. Valuation of unbooked apartments based on market rates nearest to the completion certificate issuance or first occupation.

Definitions provided for key terms like "apartment," "promoter," "project," "Real Estate Project (REP)," "Residential Real Estate Project (RREP)," "carpet area," and "floor space index (FSI)." By Pramod Kumar, Deputy Secretary to the Government of India, effective from April 1, 2019, enhancing transparency and compliance in real estate taxation. (Note: The principal notification was last amended by notification No. 2/2019 – Integrated Tax (Rate), dated February 4, 2019.)