Ministry of Finance(MoF) vide Instruction No.3/2/2020-GST dated 24th June 2020 clarified the Subject Matter of "Payment of GST by Real Estate Promoter/Developer supplying construction of residential apartment etc, on the shortfall value of inward supplies from registered supplier at the end of the financial year".
To get a grasp of the whole matter, let us rewind back and understand an early Notification, wherein the Central Board of Indirect Taxes & Customs (CBIC) prescribed in one of the conditions of notification that w.e.f 1 April 2019, At least Eighty Percent of the value of inputs and input services(other than services by way of grant of development rights, long term lease of land or Floor Space Index, electricity, high-speed diesel, motor spirit, natural gas), used in supplying of construction service, shall be received by the promoter/developer from registered supplier only.
In the case of the shortfall from the said threshold of 80 per cent, the promoter/developer shall pay the tax on the value of input and input services comprising such shortfall in the manner as has been prescribed vide said notification. The Tax shall be paid through a prescribed form electronically on the GST portal by the end of the quarter following the financial year. Accordingly for FY:2019-20, tax on such shortfall is to be paid by the 30th June 2020.
In the above context, Representations were received seeking details of prescribed form on which the said tax amount has to be reported. It has been instructed by MoF that Form DRC-03, as already prescribed earlier, shall be used for making the payment of such tax by promoter/developer.
Accordingly, Person required to pay tax on the shortfall from threshold requirement of procuring input and input services (below 80%) from the registered person shall use the form DRC-03 to pay the tax electronically on GST Portal within the prescribed time period.
It is to be noted that as part of Covid-19 relief measures, the government on the recommendation of GST Council has extended the time limit of Compliance falling between 20th April 2020 and 29th June 2020 to 30th June 2020. This time limit has been further extended to 31st August 2020.
Thus, Real Estate/Promoters liable to pay tax under DRC-03 till 30th June 2020 now have the time to pay tax under from DRC-03 till 31st August 2020 without any penalty under the CGST Act.
Source: www.cbic-gst.gov.in
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Thanks a lot Sir ...
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