RESTRICTION ON INPUT TAX CREDIT TO DEVELOPERS

[YUWRAJ KOTHARI]

IN CASE OF DEVELOPERS TAKEN FULL CREDIT OF ITC BUT SUPPLY/ SALES EFFECTED 50% ONLY AND THERE IS NO BALANCE IN INPUT CREDIT LEDGER.NOW OBTAIN OCCUPATION CERTIFICATE (O.C) THUS NOT REQUIRED TO PAY GST. WHETHER AMOUNTS TO EXEMPT SUPPLY POST O.C ??? AND THUS REQUIRE TO REVERSE PROPORTIONATE ITC TAKEN (REFER SEC 17(3))

ALSO WHETHER MEANING THAT CAN BE DEEMED INPUT AFTER OBTAINING O.C SHALL BE RESTRICTED SHOULD BE APPLIED???

[KASTURI SETHI]

Note the language of Sechedule-II, Section 7 of CGST Act.

".................................except where the entire consideration is received after issuance of completion-certificate, where required by the competent authority or after its first occupation, whichever is earlier."

The condition for eligibility of exemption from GST is that ENTIRE Consideration is received after......".

You are not eligible for exemption.

[Himansu Sekhar]

If some of the flats are not booked before occupancy the on those flats no gst is aspplicable. Reverse tyheproportionate credit.

[Himansu Sekhar]

On those flats you have received advance before occupancy certificate , you are liuabnle tyo past gst till final consideration

AI Summary

Restriction on input tax credit: developers must reverse proportionate ITC where entire consideration was not received post occupation certificate. Where a developer claimed full input tax credit but did not receive the entire consideration after issuance of the occupation certificate, the exemption tied to receipt of the entire consideration post O.C. is inapplicable. Developers who received advances or consideration before O.C. are taxable and must reverse proportionate ITC attributable to supplies not meeting the post O.C. entire consideration condition, while units not booked or paid for before O.C. may remain exempt and require corresponding ITC adjustments.