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TMI BlogReverse Charge Mechanism in GST- Real Estate SectorX X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as RREP) (ia) Construction of residential apartments other than affordable residential apartments by a promoter in an RREP (ib) Construction of commercial apartments (shops, offices, godowns etc.) by a promoter in an RREP Which construction project commences on or after 1 st April, 2019 or in an ongoing in a Real Estate Project (herein after referred to as REP) other than RREP, (ic) Construction of affordable residential apartments by a promoter in a Real Estate Project (herein after referred to as REP) other than RREP, (id) Construction of residential apartments other than affordable residential apartments by a promoter in a REP other than a RREP In respect of above entry no. 3 covered by items (i), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility in the month not later than the month of June following the end of the financial year. In case of Cement purchase from unregistered person Where cement is received from an unregistered person, the promoter shall pay tax on supply of such cement at the applicable rates on reverse charge basis Time of supply - Tax under RCM on cement, received from unregistered person shall be paid in the month in which cement is received. In case of Cement purchase from unregistered person Where capital goods is received from an unregistered person, the promoter shall pay tax on supply of such capital goods at the applicable rates on reverse charge basis. Time of supply - Tax under RCM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment etc.[ Instruction No. 3/2/2020 - GST, dated 24 th June 2020 ] A revised GST rate has been prescribed, w.e.f. the 1st April, 2019 on the supply of service by way of construction of residential apartment. (These rates have been prescribed Vide Notification no. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended. Person required to pay tax in accordance with the Notification no. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended on the shortfall from threshold requirement of procuring input and input services (below 80%) from registered person shall use the form DRC-03 to pay the tax electronically on the common portal within the prescribed period. Rate of Tax for the purpose of payment of RCM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 Y 4 Bricks 15 Y 5 Flooring tiles 10 Y 6 Paints 5 Y 7 Architect/ designing/ CAD drawing etc. 10 Y 8 Aluminium windows, Ply, commercial wood 15 Y In this example, the promoter has procured 80 per cent. of goods and services [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Architect/ designing/ CAD drawing etc. 10 Y 8 Aluminium windows, Ply, commercial wood 15 N In this example, the promoter has procured 80 per cent. of goods and services including cement from a GST registered person. However, he has procured paints, aluminum windows, ply and commercial wood etc. from an unregistered supplier. Hence at the end of financial year, the promoter is not required to pay GST on inputs on reverse charge basis. Illustration 3: A promoter has procured following goods and services [other than services by way of grant of development rights, long term lease of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... windows, ply and commercial wood etc. from an unregistered supplier. Thus, value of goods and services procured from registered suppliers during a financial year falls short of threshold limit of 80%. To fulfill his tax liability on the shortfall of 30%. from mandatory purchase, the promoter has to pay GST on cement at the applicable rate on reverse charge basis. After payment of GST on cement, on the remaining shortfall of 15%, the promoter shall pay tax @ [ 18% (9% + 9%) ] per cent. under RCM. what is the Self Invoicing? Self-invoicing is to be done when purchased from an unregistered supplier, and such purchase of goods or services falls under RCM. This is because your supplier cannot issue a GST-compliant invoice to you, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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