The GST Council is likely to clarify that going ahead, the construction of civil structures, like bridges, roads, etc., which are not intended for sale to a buyer, will get a refund of the accumulated input tax credit (ITC) from the date the notification is issued, a senior government official told Moneycontrol.

In a departure from the stand taken in the case of the online gaming sector, wherein Goods and Services Tax (GST) notices have been sent ‘retrospectively,’ the Council is likely to clarify that the tax  notification will apply only prospectively, so that no demands are raised for the earlier period, the official said.

“In the previous GST Council meeting, it was discussed if the construction of bridges, roads, etc., which are civil structures, should get a refund of the accumulated ITC. The refund was ruled out for real estate that’s sold. We have agreed that we will not rake up past cases. The clarification will be issued in the next meeting,” he said.

Stakeholders have sought a clarification on the refund of accumulated ITC for bridges and roads, as there was no uniform stand being taken by states.

The GST Council will clarify that the matter of refund of accumulated ITC will apply prospectively, as some states have refunded the accumulated ITC, while others have not  for civil structures like bridges and roads.

The GST law committee members, except from the state of Karnataka, were of the view that civil structures intended for sale to a buyer, along with land or undivided share of land (e. g.,  your share of the land when you buy a flat), will not be eligible for refund of accumulated ITC.

In the real estate sector, GST is applicable on the  labour  and materials used in the    construction of a building, but there is no GST on the sale of a readymade building or flat.

In case of online gaming, the companies earlier paid 18 percent GST on platform fees for skill-based games, while betting and gambling fell under the 28 percent slab. The provision under the GST law on taxing betting and gambling is now being invoked in the case of online gaming platforms, regardless of whether the games are of skill, or of chance (like gambling).

Source: Money Control
https://www.moneycontrol.com/news/business/economy/gst-construction-of-civil-structures-like-bridges-roads-entitled-to-itc-refund-says-official-11546781.html