The GST Council is likely to soon clarify that the Real Estate Regulatory Authority (RERA) will not be required to pay Goods and Services Tax (GST). The regulatory authority, which functions as a regulator for the realty sector, was set up in different states to ensure transparency in real estate projects, protect the interest of consumers, and establish an adjudicating mechanism for speedy dispute redressal.
After discussions with RERA functionaries about the nature of their function it was decided that GST is not applicable to them, the official said, adding that RERAs are funded by respective state governments and hence levying GST would mean taxing state governments.
Certain services offered by key regulatory bodies such as RBI, SEBI, and IRDA were not subject to GST. This exemption was lifted on July 18, 2022, leading to discussions about the tax implications for RERA bodies as well.
Furthermore, in the residential real estate sector, Input Tax Credit (ITC) is not permissible, which means excluding RERA authorities from GST considerations could potentially reduce expenses for both developers and homebuyers. Consequently, a clarification from the GST Council on this matter would be significantly beneficial for the sector..
