Credai-Gujarat seeks GST clarity on FSI purchases
Ahmedabad: Ahead of the forthcoming GST Council meeting, Credai Gujarat has submitted a representation to state govt urging it to take up key taxation issues impacting housing delivery, demanding clarity on GST applicability to FSI and additional FSI purchased from urban local bodies. The developers’ body said field tax offices have been raising 18% GST demand notices on charges paid to municipal corporations and urban development authorities for FSI and additional FSI, even though these are levied as part of statutory town-planning functions. Credai argued that functions entrusted to municipalities under Article 243W of the Constitution — read with Section 7(2)(b) of the CGST Act and Notification 14/2017 — are treated as neither supply of goods nor supply of services, and therefore should not attract GST. “Despite the statutory framework that places municipal planning functions outside GST, members are receiving notices demanding 18% tax on FSI and additional FSI charges, creating avoidable uncertainty and project delays,” said a Credai-Gujarat office-bearer. The representation also sought reforms to the definition of affordable housing under GST. Credai-Gujarat proposed adopting RERA carpet area as the sole qualifying criterion, instead of the current dual test of area and a price cap of Rs 45 lakh.
