GST Dept Scrutinizes Real Estate Developers' Expenses for 2017-18

25 Oct 2023 CW Team

That year, residential real estate was subject to a 12% GST rate, providing developers the option to apply for an Input Tax Credit (ITC). Developers may have manipulated the system by obtaining phony invoices in order to increase their costs, but there is no way to verify suppliers' GST compliance.

According to a senior official in the state's GST department who spoke on the record on the condition of anonymity, about 20,000 letters were sent to taxpayers in Gujarat whose tax returns were being reviewed. This project was launched as the deadline for issuing notices for fiscal year 2017-18 approached.

According to Section 73 of the GST Act, a large majority of these correspondences were directed at builders and covered both the 2017-18 and 2018-19 fiscal years. Our inquiry discovered that numerous developers had falsified supplier invoices in order to exaggerate their expenses. We have put in place robust monitoring mechanisms to detect such fraudulent transactions. Developers are given the option of either offering a defense or not for these transactions or remitting the applicable tax charges.

Chartered Accountant Karim Lakhani provided context, elucidating that, “At the outset, the GST rate for residential real estate stood at 12%, enabling developers to transfer the Input Tax Credit (ITC) advantage to purchasers. Nevertheless, in 2019, the central government modified the GST rates to 1% for affordable housing and 5% for other types of residential properties. In the course of this transition, numerous ongoing projects were granted the flexibility to opt for either the previous or the updated tax frameworks, resulting in a convoluted tax scenario for developers.

The State GST department has sent about 20,000 notifications to a variety of taxpayers from various industries, focusing mostly on real estate developers, asking explanations for their expenses during the 2017-18 fiscal year. GST officials believe that this scrutiny is the result of a lack of a reliable mechanism to track suppliers' GST compliance at the time.That year, residential real estate was subject to a 12% GST rate, providing developers the option to apply for an Input Tax Credit (ITC). Developers may have manipulated the system by obtaining phony invoices in order to increase their costs, but there is no way to verify suppliers' GST compliance.According to a senior official in the state's GST department who spoke on the record on the condition of anonymity, about 20,000 letters were sent to taxpayers in Gujarat whose tax returns were being reviewed. This project was launched as the deadline for issuing notices for fiscal year 2017-18 approached.According to Section 73 of the GST Act, a large majority of these correspondences were directed at builders and covered both the 2017-18 and 2018-19 fiscal years. Our inquiry discovered that numerous developers had falsified supplier invoices in order to exaggerate their expenses. We have put in place robust monitoring mechanisms to detect such fraudulent transactions. Developers are given the option of either offering a defense or not for these transactions or remitting the applicable tax charges.Chartered Accountant Karim Lakhani provided context, elucidating that, “At the outset, the GST rate for residential real estate stood at 12%, enabling developers to transfer the Input Tax Credit (ITC) advantage to purchasers. Nevertheless, in 2019, the central government modified the GST rates to 1% for affordable housing and 5% for other types of residential properties. In the course of this transition, numerous ongoing projects were granted the flexibility to opt for either the previous or the updated tax frameworks, resulting in a convoluted tax scenario for developers.

Infrastructure Urban

13 Mar 2026

Implementation Status of Jal Jeevan Mission

Since August 2019 the Government has implemented Jal Jeevan Mission to provide assured potable water through household tap connections in rural India. At the start of the mission only 32.3 million (mn) rural households, representing 16.7 per cent, were reported to have tap water connections. States and union territories have reported that 125.8 mn additional rural households have since been provided with tap connections. As a result, of about 193.6 mn rural households roughly 158.2 mn, or 81.71 per cent, are reported to have tap water supply at home.\n\nThe State, district and village level st..

Infrastructure Urban

13 Mar 2026

Jal Jeevan Mission Reaches Eighty One Per Cent Rural Coverage

The Government reported substantial progress under the Jal Jeevan Mission, launched in August 2019 to provide tap water to every rural household. At launch only 32.3 million (mn) rural households had tap connections and states and Union territories reported provision of 125.8 mn additional households by March 2026. Consequently, out of about 193.6 mn rural households around 158.2 mn, or 81.71 per cent, are reported to have tap water at home. The Finance Minister announced extension of the mission until 2028 in the 2025-26 budget speech. The Swachh Bharat Mission Grameen, launched in October 20..

Infrastructure Urban

13 Mar 2026

Empowering Local Governance for Sustainable Rural Water Supply

The Ministry of Jal Shakti has aligned the Jal Jeevan Mission (JJM) with the 73rd Amendment to strengthen village level planning and community ownership of water supply. Gram Panchayats, village water and sanitation committees and Pani Samitis are to plan, implement, manage and maintain piped water systems, with gram sabha processes formalising handover and oversight. Implementation support agencies including non government organisations, community based organisations and self help groups have been empanelled to train local committees and promote women participation. Under JJM, the department ..