Input Tax Credit reversal under rules 42/43

[Ethirajan Parthasarathy]

It is not clear when the Input Tax Credit reversal is to be done as per Rule 42 and Rule 43 of CGST Rules for Villa Projects.

In the case of villa projects, one villa might have been completed and even occupied while many other villas would not have been completed nor sold also.

Invariably there is no statutory requirement to obtain Completion Certificate (CC) or Occupancy Certificate (OC).

Please clarify.

[KASTURI SETHI]

As per serial no. 5 (b) and Explanation (1) of Schedule-II (Section 7) of CGST Act, Completion Certificate by the Competent Authority is required.

[Shilpi Jain]

Pls check whether the project is registered under RERA as one complete project comprising of all the villas together?

In such case entire project CC would be required.

In any case the reversal under rules can be possibily be done only after all the villas are completed.

Further facts required to better comment

AI Summary

Input Tax Credit reversal tied to project completion and requirement of completion certificate for villa developments. Input Tax Credit reversal for villa projects depends on completion evidence: a Completion Certificate by the competent authority is required under Schedule II explanation to treat units as complete; if the development is a single registered project under the real estate regulatory framework, an overall project Completion Certificate governs completion for the entire project, and reversal under the GST reversal rules would be applicable only after all villas in the registered project are completed.