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 Energy

08 Jun 2026

India Adds Record 44.61 GW Solar Capacity in FY2026

India’s solar sector reached a milestone in FY2026, with cumulative installed capacity crossing 150 GW and annual additions hitting a record 44.61 GW, exceeding the government target of 34 GW and nearly doubling FY2025’s 23.83 GW. Distributed Renewable Energy contributed 16.3 GW, while PPA and C&I segments accounted for 34 per cent and 30 per cent, respectively.India has risen from 9th globally in 2015 to 3rd in cumulative solar capacity by 2025 and is set to become the world’s second-largest solar market in annual installations in 2026. Seven states, led by Rajasthan and Gujarat, ac..

Abhee Ventures unveils Scottish-themed 45-acre township in Bengaluru

Abhee Ventures, a leading South Indian real estate developer, has announced “Codename New Dimension,” a 45-acre Scottish-themed residential township at Gunjur on Whitefield–Sarjapur Road, Bengaluru. Strategically located between Whitefield and Sarjapur Road, Gunjur benefits from strong connectivity to the Outer Ring Road IT corridor, ITPL, EPIP, the upcoming Dommasandra Metro Station, and the proposed SWIFT City and Peripheral Ring Road.The township, designed in collaboration with London-based UHA London and India’s RSP Architects, offers low-density living with 85 per cent open spaces..

BPE launches world’s thinnest Active Tile for legacy data centres

Best Power Equipments (India) Pvt Ltd (BPE), a leading provider of power solutions, data centre systems, and Battery Energy Storage Systems (BESS), has launched the BPE Active Tile, the world’s thinnest active tile designed for legacy data centres and telecom infrastructure. At just 65 mm thick, the tile requires significantly less space than conventional active tiles, which need nearly 450 mm floor depth.“Most legacy data centres were built decades ago for lower IT loads and traditional airflow patterns,” said A Prabhu, Executive Director – Technical (Global Operations), BPE. “As ra..