Rajesh Real Estate Vs Union of India (Bombay High Court)
Bombay High Court has directed the Goods and Services Tax (GST) Department to permit Rajesh Real Estate, a real estate developer, to rectify a bona fide clerical error in their GST payment forms (DRC-03). The ruling allows the petitioner to correct the financial year inadvertently mentioned in two payment forms from 2019-20 to 2018-19, preventing a duplicate tax demand.
The case emerged from the new GST scheme for the real estate sector, introduced via Notification No. 3/2019 dated March 29, 2019. This scheme introduced concessional GST rates (1% for affordable housing, 5% for other residential properties) without Input Tax Credit (ITC) for new projects and unsold units of ongoing projects from April 1, 2019. Developers with ongoing projects had an option to continue with old rates (8% or 12% with ITC), but those who did not exercise this option were deemed to have chosen the new rates. Consequently, developers under the new regime were required to reverse ITC pertaining to unsold units as of March 31, 2019, as per Rule 42 of the CGST Rules, 2017. If ITC had already been utilized, developers were mandated to make the payment in cash.
