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Taxation Central Ministry of Finance Central Goods and Services Tax Act, 2017

Revised Taxation for Construction and Real Estate Projects

19-Oct-2023 | 15/2023-Union Territory Tax (Rate)

Ministry of Finance has issued a Notification, amending the previous Notification No. 15/2017- Union Territory Tax (Rate) dated 28th June 2017. These changes, effective from 20th October 2023, bring about a significant shift in the tax implications for construction projects, particularly those intended for sale. The revised notification specifically addresses the construction of a complex, building, or a part thereof, intended for sale to a buyer. Now, the tax applies to projects where the charged amount includes the value of land or an undivided share of land. This is unless the entire consideration is received post the issuance of a completion certificate or after the first occupation, whichever comes earlier. This development holds substantial implications for the construction and real estate sector. It ensures that transactions involving the sale of constructed properties are subject to the appropriate tax, especially when land value is involved. Notably, the conditions surrounding the issuance of a completion certificate, or the first occupation play a crucial role in determining the timing of tax liability. Entities operating in the construction and real estate domain should swiftly align their practices to comply with these updated regulations. Adapting promptly will be crucial in navigating the altered taxation landscape.

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