Reverse Charge Mechanism for Real Estate Projects

New notification issued under section 5(4) of the IGST Act, 2017, recommending reverse charge for certain goods and services in real estate.

Recipient, the promoter, obligated to pay tax on supplies received from unregistered suppliers. Categories include goods and services constituting shortfalls in minimum purchase values required for project construction.

Cement and capital goods supplied to the promoter for project construction also covered under reverse charge.

Definitions provided for key terms like "promoter," "project," "Real Estate Project (REP)," "Residential Real Estate Project (RREP)," and "floor space index (FSI)."

Effective from April 1, 2019, impacting tax dynamics in the real estate sector. Pramod Kumar, Deputy Secretary to the Government of India, oversees the implementation of this notification.