Claim for GST Refund

• Prior to the 48th GST Council Meeting, unregistered buyers of flats had limited options to claim a refund of GST paid upon cancellation, only being able to claim it from the builder within a specific timeframe when the builder could issue a credit note.
• This caused difficulties and increased costs for unregistered buyers who were unable to claim a refund in time, resulting in financial burden and hardships.
• To address these issues, the Central Board of Indirect Taxes and Customs introduced Notification No. 26/2022 CT and Circular No. 188/20/2022 GST during the 48th GST Council Meeting.
• These notifications introduced a new functionality for unregistered buyers to claim a refund of GST paid on cancelled flats within the prescribed time limit.
• As a result, unregistered buyers who cancel their agreement to purchase a flat can now claim a refund of the GST paid from either the builder or the government, depending on the timeline of the cancellation agreement.
• This new provision aims to alleviate the financial burden and hardships faced by unregistered buyers and make the refund process more accessible and efficient.

GST refund from the builder –

If you have purchased a flat or real estate property from a builder and have paid GST on the transaction, you may be eligible to claim a refund of the GST under certain circumstances. Here are the steps you can follow to claim the refund from the builder:

1. Gather necessary documents: You will need to have the original invoice or receipt issued by the builder, along with any other relevant documents such as the agreement of sale and the cancellation agreement, if applicable.
2. Determine eligibility: Check whether you are eligible for a refund. For example, you may be eligible if you have cancelled the agreement to purchase the flat or if the builder has not completed construction within the agreed-upon timeline.
3. Submit refund claim: You can file a refund claim with the builder by submitting the necessary documents along with a written request for a refund. Make sure to specify the amount of the refund you are seeking and the reason for the refund.
4. Wait for response: The builder will review your claim and determine whether you are eligible for a refund. If your claim is approved, the builder will issue a credit note to you for the amount of the refund.
5. Receive the refund: Once the builder issues the credit note, you can claim the refund by adjusting the amount against the GST payable on future purchases from the builder. Alternatively, you can apply for a cash refund of the amount by filing a refund claim with the GST authorities.

It’s important to note that the refund claim must be filed within the prescribed time limit, which is generally two years from the date of payment of GST. Additionally, if you have claimed input tax credit on the transaction, you will not be eligible for a refund.

GST refund from government –

If you are unable to claim a refund of GST from the builder, or if the builder refuses to issue a credit note, you may be able to claim the refund from the government. Here are the steps you can follow to claim the refund from the government:

1. Gather necessary documents: You will need to have the original invoice or receipt issued by the builder, along with any other relevant documents such as the agreement of sale and the cancellation agreement, if applicable.
2. Determine eligibility: Check whether you are eligible for a refund. For example, you may be eligible if you have cancelled the agreement to purchase the flat or if the builder has not completed construction within the agreed-upon timeline.
3. File refund claim: You can file a refund claim with the GST authorities by submitting the necessary documents along with a written request for a refund. Make sure to specify the amount of the refund you are seeking and the reason for the refund.
4. Wait for response: The GST authorities will review your claim and determine whether you are eligible for a refund. If your claim is approved, the authorities will issue a refund order to you.
5. Receive the refund: Once the refund order is issued, the refund amount will be credited to your bank account.

It’s important to note that the refund claim must be filed within the prescribed time limit, which is generally two years from the date of payment of GST. Additionally, if you have claimed input tax credit on the transaction, you will not be eligible for a refund from the government.

Here are some key points –

1. Unregistered buyers of flats faced difficulties in claiming refunds of GST paid upon cancellation from the builder within a limited timeframe.
2. The Central Board of Indirect Taxes and Customs issued Notification No. 26/2022 CT and Circular No. 188/20/2022 GST during the 48th GST Council Meeting to address these issues and introduced a new functionality for unregistered buyers to claim a refund of the GST paid on cancelled flats within the prescribed time limit.
3. To claim a refund of GST paid on a cancelled flat, the buyer must have the original invoice or receipt issued by the builder and file the refund claim within the prescribed time limit.
4. The article provides step-by-step instructions for claiming a refund of GST paid on a cancelled flat from the builder, including gathering necessary documents, determining eligibility, submitting the refund claim, waiting for a response, and receiving the refund.
5. The article also outlines the process for claiming a refund of GST paid on a cancelled flat from the government, including gathering necessary documents, determining eligibility, filing the refund claim, waiting for a response, and receiving the refund.
6. Certain limitations apply, such as the ineligibility for a refund if input tax credit has been claimed on the transaction.
7. Understanding the refund process and eligibility criteria is important for claiming a refund of GST paid on a cancelled flat.

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