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The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued fresh guidelines enabling homebuyers to claim refunds of excess Goods and Services Tax (GST) collected by developers and has directed all registered promoters to levy GST strictly at the rates notified by the Central government. The authority said instances had come to light where homebuyers were charged GST above the prescribed rates despite earlier instructions. In coordination with the State Tax Department, UP RERA has outlined the refund process for cases involving cancelled projects, terminated agreements or revoked allotments where the statutory period for developers to issue credit notes has expired. The regulator has also instructed promoters to refund excess GST wherever applicable and ensure full compliance with the notified tax rates.
The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has introduced fresh guidelines to facilitate the refund of excess Goods and Services Tax (GST) collected from homebuyers and has directed all registered real estate promoters to comply strictly with the GST rates notified by the Central government. The authority announced the measures on Monday after identifying instances where homebuyers had been charged GST above the prescribed rates despite earlier regulatory directions.
According to UP RERA, GST on all projects registered with the authority must be collected only at the rates notified by the Centre. It noted that the applicable tax rates had already been communicated to all registered promoters and real estate agents through a circular issued in January 2025. However, the regulator said it had received cases indicating that some developers had continued to collect GST at rates exceeding those permitted.
To address these cases and protect the interests of homebuyers, UP RERA said it had coordinated with the State Tax Department to establish a mechanism for the refund of excess GST.
Under the prescribed procedure, a homebuyer who has paid GST while purchasing a residential unit or availing construction services may seek a refund directly from the GST department if the project is cancelled, the agreement is terminated or the allotment is revoked after the statutory time limit for the promoter to issue a credit note has expired.
For such claims, an unregistered allottee must obtain temporary registration on the GST portal using a Permanent Account Number (PAN). The applicant will then be required to submit Form GST RFD-01 under the category "Refund for Unregistered Person", along with proof of GST payment, supporting documents and a certificate issued by the promoter. The refund application will be processed after verification by the competent GST authority in accordance with the applicable provisions of the GST law.
The regulator clarified that where the statutory period for issuing a credit note is still available, the responsibility rests with the promoter to issue the credit note or refund the entire amount, including the GST collected from the allottee. Only after the expiry of the statutory period would the homebuyer be required to approach the GST department directly for a refund.
UP RERA further stated that refund applications must be submitted within two years from the date of cancellation of the project, termination of the agreement or revocation of the allotment. It also clarified that refund claims involving GST amounts below INR 1,000 would not be considered.
Reiterating its directions to developers, the authority instructed all registered promoters to adhere strictly to the GST rates notified by the Central government and not to collect GST beyond the prescribed rates under any circumstances. It added that wherever excess GST had been collected from an allottee, promoters must take the necessary steps to ensure that the excess amount is refunded in accordance with the applicable legal provisions and the guidelines issued by the State Tax Department.
Source - PTI
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