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Tax Refund Eligibility for Unregistered Recipients of Real Estate Services

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Last Updated on June 29, 2023 by Kanakkupillai

Tax Refund Eligibility

Buyers and sellers make substantial advances in the real estate sector during construction services. If the construction period exceeds three months, it is considered a continuous service under the Central Goods and Services Tax (CGST) framework. However, there may be situations where these services are cancelled between the buyer and seller. If the buyer fails to credit the note within the specified time limit, the service provider has to withhold the GST advance amount received from the buyer.

THE REFUND IS APPLICABLE TO THE FOLLOWING CATEGORIES OF PERSONS

Refunds in the case of real estate services apply to registered and unregistered persons under the Goods and Services Tax (GST) Act.

ELIGIBILITY OF REFUND:

Even if a person is unregistered under the GST Act, they are eligible for a refund if they have paid for construction services. This provision ensures unregistered individuals who have paid taxes on such services can claim a refund.

THE AMOUNT FIXED FOR RECEIVING REFUND:

Under GST law, refunds of less than INR 1000 cannot be claimed. If the refund amount is below this threshold, it is not eligible for a refund.

TIME LIMIT FOR APPLYING FOR A REFUND:

The time limit for claiming a refund is within 2 years from the date of cancellation by the supplier of the services. It is crucial to file the refund claim within this timeframe to avail of the refund.

CLAIMING OF REFUND:

To claim a refund, an unregistered person eligible for a refund must go through a temporary registration process. This involves completing the Aadhaar notification process and submitting the unregistered person refund claim document, UPR-1. The refund application should be filed at the supplier’s residence, and temporary registration requires a PAN card. All relevant documents and procedures should be attached.

THE DOCUMENTS REQUIRED FOR REFUND CLAIM:

To support the refund claim, certain documents need to be submitted. These include copies of all invoices, the contract between the buyer and supplier, the unregistered person refund claim document, and relevant details provided as supporting proof.

Related Services

GST Registration Online

GST Return Filing Online

FAQ’s:

Who is eligible for a tax refund for real estate services?

Unregistered persons under the GST act are eligible for a refund if they have paid GST against constructional services.

What is the time limit for claiming a refund?

The time limit for claiming a refund is within 2 years from the date of cancellation by the supplier for the services provided.

What documents are required for a refund claim?

The necessary documents include copies of all invoices, the contract between the buyer and supplier, the unregistered person’s refund claim, and relevant proofs.

G.Durghasree B.A.B.L (Hons)

G Durghasree B.A.B.L (Hons) is a registered trademark attorney with extensive experience as an Advocate for a period of 8 years. She possesses expertise in trademark law, including trademark filing and trademark hearings. Additionally, she is skilled in contract drafting and reviewing, providing legal advice and opinions, particularly in the areas of Company Law, Insolvency and Bankruptcy Code (IBC), and Goods and Service Tax Law (GST). Her experience encompasses both litigation and non-litigation aspects of these laws.