TaxTMI 
TaxTMI 
TaxTMI 
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.
How to report payments for builder in GSTR-1?
Mohit Mrinal
Builders must report payments by milestone invoices in GSTR-1; advances reporting risks penalties and credit issues under GST rules Payments to builders in GSTR-1 should be reported by issuing tax invoices according to construction milestones, with invoices reflected in B2C or as advances in Table 11A. Reporting as advances may lead to complications if an agreement is canceled after two years, as credit note issuance has a prescribed time limit, potentially preventing tax liability adjustments later. Circular guidance allows buyers to claim refunds rather than builders, implying expired credit note timelines for tax invoices. Reporting advances instead of invoices may attract penalties for non-compliance. For sales of residential units under construction to registered entities, despite the buyer being ineligible for input tax credit due to concessional rates, reporting in B2B (Table 4) is generally required for compliance, though some query if B2C reporting is permissible. Builders should adhere to legal procedures to avoid penalties and consider contractual clauses to manage refunds effectively. (AI Summary)