State GST issues 20,000 notices to developers for expense inquiries

19 Oct 2023 CW Team

The State GST department has recently issued approximately 20,000 notices to a variety of taxpayers across sectors, particularly focusing on real estate developers, asking for clarifications regarding their expenditures during the 2017-18 financial year. According to GST officials, this scrutiny is due to the absence of a robust system to monitor suppliers? GST compliance during that period. Specifically, residential real estate was subjected to a 12% GST rate in that year, allowing developers the option to claim Input Tax Credit (ITC). However, the lack of mechanisms to validate suppliers' GST compliance led to potential misuse, with developers resorting to obtaining fake invoices to inflate their expenses.

Speaking on the condition of anonymity, a high-ranking official from the State GST department stated, "We issued approximately 20,000 notices in Gujarat to taxpayers whose returns were under scrutiny as the deadline for issuing notices for the 2017-18 financial year was approaching. Many of these notices were directed at builders, spanning both the 2017-18 and 2018-19 periods, under Section 73 of the GST Act. Our investigation revealed that numerous developers had utilised counterfeit invoices from suppliers to artificially inflate their expenses. We have mechanisms in place to detect such fraudulent transactions. Developers have been given the opportunity to either justify these purchases or settle the corresponding tax liabilities."

Chartered Accountant Karim Lakhani explained the context, stating, "Initially, the GST rate for residential real estate was 12%, allowing developers to pass on the benefit of ITC to buyers. However, in 2019, the central government revised the GST rates to 1% for affordable housing and 5% for other residential units. During this transition, many ongoing projects were given the choice to adhere to either the old or new systems, leading to a complex tax landscape for developers."

Infrastructure Transport

07 Apr 2026

Tunnelling Begins for Thane, Borivali twin tunnel project

Tunnelling work has commenced for the 11.84-km Thane–Borivali Twin Tunnel, set to be India’s longest urban road tunnel, marking a key milestone in Mumbai’s infrastructure development.As per a post shared by Mumbai Metropolitan Region Development Authority on social media platform X, the tunnel boring machine (TBM) ‘Nayak’—the country’s largest single-shield hard rock TBM for an urban tunnel—was launched by Devendra Fadnavis on Tuesday. The event was attended by Eknath Shinde and Sunetra Pawar, among other dignitaries. A second TBM, ‘Arjuna’, is expected to be launched so..

Large Format Store Planned At M G Road Metro Station

M G Road station in Bengaluru is set to host the city’s first large-format commercial and experience space, with planning led by Bangalore Metro Rail Corporation Limited. BMRCL has invited proposals to develop and operate a central business district destination at the Purple?Pink Line interchange. The plan positions the station as a commercial hub designed to serve a broad commuter base across the city. The proposal is part of a broader effort to activate transit nodes commercially. Tender documents set a minimum monthly rental of Rs 0.944 million (mn), inclusive of GST, for the large-format..

Government Cancels Auction Of Eleven Critical Mineral Blocks

The government has cancelled the auction of 11 critical and strategic mineral blocks after receiving a poor investor response and failing to attract a sufficient number of qualified bidders. The decision represents a setback to plans to ramp up domestic exploration and production of critical minerals amid global supply chain disruptions and rising demand for materials used in clean energy and advanced technologies. The mines ministry issued an annulment notice setting out the reasons for the cancellations. The annulment notice indicated that the auction process for five mineral blocks was canc..