How to report payments for builder in GSTR-1?

[Mohit Mrinal]

What is correct in GSTR-1 for real estate? Showing invoices at every stage of construction and reporting it in B2C or reporting all the payments as advances in table 11A.  Also, if it is reported as advances. What impact will it have in a rare case when an agreement is cancelled after 2 years. Can the refund voucher in this case be created even after 2 years and subsequently tax liability can be adjusted in next tax period? Or is there any time limit for issuing it as it’s for credit note. As per circular Circular No. 188/20/2022-GST dated 27th December, it does allow the buyer to claim for refund rather than the builder. So this might infer that  the credit notes timeline has expired in case of tax invoices issued. But what about when we report it as advances and not as tax invoices? Kindly advise in both the cases of tax invoice/ receipt voucher if both the cases applicable.

[Shilpi Jain]

As per law, tax invoice to be issued as per milestones in agreement. IN case of refund due to cancellation after time limit, builder should also be allowed to go for refund, but would be a time taking painful process.

Instead see if suitable clauses can be incorporated in the AOS for customer to go for refund.

Many in the industry disclose as advance in 11A and adjust on refund of advances. Could attract general penalty for not follwing procedure set out in the law.

[Mohit Mrinal]

Thanks for your Reply. i had one more query. where should the invoices for sale of residential flats/units/apartments be reported in GSTR-1 when that residential unit under construction is sold to a "registered" entity? B2B ( Table no. 4) or B2C others (Table no. 7). The buyer will obviously not entitled to ITC as the tax rate is 5%/1% without ITC. but is it mandatory for reporting in B2B? or it can be reported in B2C too? The buyer is aware of blocked ITC and does not insist on getting invoice with his GSTIN. i am just asking for the compliance from builders side. your response shall be of great help. kindly note it is residential unit and not commercial unit.

AI Summary

GSTR-1 reporting for real estate: invoice per construction milestone or advances affects refund and credit-note treatment. Issuance of tax invoices should follow contractual milestones and be reported accordingly in GSTR-1; treating receipts as advances in Table 11A is common but departs from statutory invoicing norms and may attract penalties. Where a residential unit under construction is sold to a registered buyer who provides GSTIN, reporting as B2B is the compliant approach even if ITC is blocked; absent GSTIN, builders often report as B2C, which affects treatment of credit notes and refunds.