Real estate developers can use form DRC-03 to pay the tax electronically

The Central Board of Indirect Taxes and Customs has announced that the payment of GST by real estate promoters or developers, involved in the supply of construction for residential apartments, will be required to use the Form GST DRC-03 to pay the GST shortfall value of the threshold 80% electronically on the common portal by June 30, 2020.

Real estate promoters or developers with projects remaining under construction as on March 31, 2020, had an option to choose old tax rates before GST, which were 8% for affordable apartments or 12% for other apartments with ITC.

However, under the revised GST rates which were effective from April 1, 2019, the new projects under construction for affordable residential apartments attract a GST rate of 1% without ITC and other residential apartments attract a GST rate of 5% without ITC. These new rates are applicable upon the condition that at least 80% of the input and input services, other than services by way of grant of development rights, long term lease of land or FSI, electricity, high-speed diesel, motor spirit, natural gas, used in supplying the construction service, used for the construction must be procured from a registered supplier only.

The real estate promoter or developer shall be liable to pay the tax on the value of input and input services if there is a shortfall of the threshold 80% by the end of the quarter following the financial year. For example, for FY 2019-20, tax on the shortfall must be paid by June 30, 2020.