Compliances of New Tax Regime for Real Estate Sector w.e.f. 01.04.2019

As you are aware that a new tax regime has been introduced w.e.f. 01.04.2019 for Residential Real Estate projects on which tax is payable @5% or 1% subject to various conditions attached to it.

In this regard, the Promoter Developer who is paying tax under new tax regime is required to do following compliances on yearly and monthly basis.

Yearly Compliance – in the Month of June 2020

RCM Liability in the month of June 2020– on shortfall of 80% purchase of inputs & Inputs Service from registered supplier

  • 80 % of inputs and input services shall be purchased from registered persons[except TDR, FSI, long term lease (upfront payment), electricity, high speed diesel, motor spirit, natural gas].
  • In case, the above requirement falls short of 80%, promoter has to pay tax @ 18% on reverse charge basis on amount of shortfall.
  • The promoter Developer shall be required to maintain project wise account of inward supplies from registered and unregistered supplier and calculate tax payments on the shortfall at the end of the financial year and shall submit the same in the prescribed form electronically on GST portal by end of the quarter following the financial yeare. 30.06.2020 for FY 2019-2020. The tax liability on the shortfall of inward supplies from unregistered person so determined shall be added to his output tax liability in the month not later than the month of June following the end of the financial year.
  • The Government vide Instruction No. 3/2/2020-GST dated 24.06.2020 has prescribed that the abovesaid payment of shortfall from the threshold requirement of procuring 80% inputs and input service from registered persons shall be made through Form DRC-03 on the common portal within the prescribed period i.e. 30.06.2020 for FY 2019-20.

Monthly Compliances

  • Tax on cement supplied by unregistered person – under RCM in the month in which cement is received.
  • Tax on capital goods for construction of a project supplied by unregistered person – under RCM in the month in which Capital Goods is received.
  • Input Tax Credit not availed shall be reported every month by reporting the same as ineligible credit in GSTR-3B [Row No. 4 (D)(2)]


GST Law India is a blog on GST and allied commercial laws managed by members of the law firm ALA Legal.