UP GST Department Scrutinizes 500+ Real Estate Developers Over FAR Transactions
The Uttar Pradesh GST department has issued notices to over 500 real estate developers, seeking detailed disclosures on Floor Area Ratio (FAR) purchases since July 1, 2017. This move has raised concerns in the industry about potential retroactive taxation.
GstReal EstateFarUttar PradeshDevelopersReal Estate NewsJun 29, 2025
The move stems from ongoing ambiguity over the applicability of 18% GST on the purchase of additional FAR—development rights typically bought from state authorities to allow construction beyond the permissible limit on a plot of land.
GST officials have asked developers to furnish comprehensive data on FAR transactions, including payment amounts, dates, and project locations. In Kanpur alone, over 50 developers have reportedly received individual notices. Authorities are reportedly probing whether these transactions attract GST and whether liabilities may be raised retroactively.
The enforcement action comes as the GST Council continues to deliberate the taxability of FAR purchases. If the council rules in favour of applying GST, developers may face hefty backdated demands along with interest and penalties. Legal experts caution that the implications could be severe, particularly for builders who acquired FAR between 2017 and 2025.
The crackdown isn’t limited to residential projects—non-residential constructions like hotels and private healthcare facilities are also under the scanner. Traditionally, GST, if any, on FAR was considered applicable after project completion. However, the recent notices demand disclosures even at the construction stage.
Builders have been given 30 days to respond, failing which they may face penal consequences. The move has caused unease in the real estate sector, with industry bodies urging the government to provide clarity on the matter and avoid retrospective taxation.
The issue is expected to figure prominently in upcoming GST Council meetings as developers await a final policy stance.
Frequently Asked Questions
What is FAR in real estate?
FAR, or Floor Area Ratio, is a measure of the total floor area of a building to the size of the plot of land on which it is built. It is used to control the density of development in urban areas.
Why are real estate developers being scrutinized by the UP GST department?
The UP GST department is scrutinizing real estate developers to determine if they owe GST on the purchase of additional FAR, which are development rights bought from state authorities to build beyond the permissible limit.
What is the potential impact if the GST Council rules in favor of applying GST on FAR purchases?
If the GST Council rules in favor of applying GST on FAR purchases, developers could face significant backdated demands, including interest and penalties, which could have severe financial implications.
How long do developers have to respond to the notices from the GST department?
Developers have been given 30 days to respond to the notices from the GST department. Failure to respond could result in penal consequences.
What types of projects are being scrutinized in this GST probe?
The GST probe is not limited to residential projects. Non-residential constructions such as hotels and private healthcare facilities are also being scrutinized for FAR transactions.
Related News Articles
Hardik Pandya's Net Worth: A Closer Look at His Wealth and Assets
From his lucrative IPL contracts to his impressive real estate portfolio
Boosting Realty Affordability: Experts Call for Policy Shifts and Infra Improvements
Industry experts emphasize the need for policy changes and infrastructure development to address affordability issues in the real estate market.
Pune's Real Estate Empire: Minor's Father in Custody Over Cheating Case
A Pune court has allowed the police to take custody of the father of the minor accused in the Porsche crash case, in a cheating case registered against him at Kondhwa police station.
Revolutionizing Traffic Management: Pune Police, PMC, and Google Collaborate to Improve Road Infrastructure
Pune takes a significant step towards reducing traffic congestion and travel time with the collaboration of Pune Police, PMC, and Google on 32 main roads.
New Developments in Rs 100 Crore Real Estate Investment Fraud
Prospect Realty, a firm registered before the sub-registrar of Salcete, Margao, is at the center of a massive Rs 100 crore investment fraud. The firm, engaged in the real estate business, has been accused of misleading investors with false promises. Myron
Maharashtra Government to Mandate Precast Construction for Mumbai Real Estate
The Maharashtra government is working on a policy to make precast construction mandatory for real estate projects in Mumbai, aiming to streamline construction processes and enhance building quality.