Governance Report: UP RERA to Facilitate GST Refund for Homebuyers

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued guidelines to protect homebuyers from the collection of excess Goods and Services Tax (GST) by real estate developers. The regulator has directed promoters of all registered projects to strictly levy GST only at the rates notified by the Central Government. 

UP RERA stated that cases have come to its notice where homebuyers were charged GST at rates higher than the prescribed rates. To strengthen consumer protection and ensure regulatory compliance, the authority has coordinated with the State Tax Department to facilitate refunds of excess GST collected from eligible allottees.

Under the clarified mechanism, where a project is cancelled, an agreement is terminated, or an allotment is revoked after the statutory period for issuing a credit note has expired, eligible homebuyers can approach the GST Department directly for a refund. Unregistered buyers may obtain temporary GST registration using their PAN and submit Form GST RFD-01 along with proof of tax payment and other required documents. 

Where the statutory period for issuing a credit note is still available, the promoter is responsible for issuing the credit note or refunding the applicable amount, including GST. Refund applications must generally be submitted within two years from the date of cancellation or termination of the agreement. Claims involving GST amounts below ₹1,000 will not be entertained

The measure reinforces transparency, accountability and consumer protection in Uttar Pradesh’s real estate sector. UP RERA has also warned promoters against charging GST beyond legally notified rates, signalling stricter enforcement of tax compliance and strengthening the financial safeguards available to homebuyers.