48th GST Council meeting took a critical decision bringing significant relief to all the home buyers and individuals who bought long-term insurance contracts. The GST Council has decided to allow a refund of the GST paid to developers by such home buyers in case of cancellation of their house or flat construction without receiving any credit notes within the time limit under the law.
Further, those who bought long-term insurance policies but had to cancel them in between may claim proportionate GST paid for the remaining policy period left after cancellation.
Currently, the GST law does not have any provision or procedure for allowing GST refunds to unregistered persons, specifically in cases where the service agreement or service contract is cancelled. Also, this applies in cases where the time limit to issue the credit note is over.
The Union FM on Saturday opined that it is essential that, along with an amendment to the provisions and insertion of a new CGST Rule, the Central Board of Indirect Tax and Customs (CBIC) issues a Circular to clarify the scope, applicability and process.
Many tax experts have expressed concerns about the lack of rules on refund of taxes to people unregistered under the GST law, such as a commoner. With the Council’s decision expected to be implemented after the Union Budget 2022, home buyers who had paid GST on cancelled contracts may claim a refund. The process must be hassle-free and fast to allow the common person to claim the refund easily.
Apart from this, unregistered dealers, suppliers, and composition taxpayers can also begin selling on e-commerce platforms from 1st October 2022.
For any clarifications/feedback on the topic, please contact the writer at email@example.com
Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.