Talks soon on transition issues faced by realty sector

The government has detected ₹20,000 crore worth GST evasion so far this fiscal and will take more steps to check frauds and increase compliance, a senior tax officer said on Wednesday.

Central Board of Indirect Taxes and Customs Member (Investigation) John Joseph said that between April-February 2018-19, GST evasion worth ₹20,000 crore had been detected, of which ₹10,000 crore was recovered. He said the tax officers on Tuesday detected a fake invoice worth ₹1,500 crore, which was used to claim illegal GST credit of ₹75 crore. “We have already recovered ₹25 crore and the rest is on the way,” he said.

Stating that only 5-10% of the businesses are “black sheep” and bring bad name to the industry, he said the government would take more measures to increase compliance, and act against evaders in a way such that genuine businesses do not suffer. The department would soon call a meeting of the representatives of the real estate sector to understand transition issues faced by the sector post reduction in GST rates, he said at an Assocham event here. The GST Council, earlier this week, cut tax rates on under-construction apartments and affordable housing to 5% and 1% respectively.

However, builders will not be able to claim credit for the taxes paid on inputs, such as steel, cement. The earlier GST rate on under-construction apartments and affordable housing was 12% and 8% with input tax credit (ITC), respectively.

On demand for giving ITC relief to builders of the under-construction flats, he said the sector would have to raise the issue with the Urban Development Ministry.