Hi, I own an under construction flat in Joka area of Kolkata. Could you please provide information on exactly how will GST impact me. Please provide information on the input credit benefits available to me and the impact on the below components of my payment to the builder. 1. Unit Cost ( Cost of the actual Flat) 2. Cost of Vehicle Parking 3. Floor Escalation Charges 4. privilege charge (garden facing flat) Please provide an impact analysis on the above 4 components comparing "Before GST" and "After GST" situations. ( Please explain lucidly using numbers) Thanks a lot.
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The schedule of GST rates for services as approved by the GST Council said that the “construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. The value of land is included in the amount charged from the service recipient.” These will be taxed at 12 percent with full input tax credit.
It is the practice of the builders in Kolkata to charge GST at least on flats, PLC ,parking space,accharges etc.
GST would be applicable on under construction properties at the rate of 12 percent but not on completed, ready-to-move-in apartments.
2) Earlier on the amount of excise duty and VAT builder pay on cement or steel, no set off was available to them but under the new GST regime, developers will be able to get benefits on taxes.
3) purchasers should not worry about the developers not passing on the benefit of the additional tax credit because GST also provides for an anti-profiteering provision which makes it mandatory for the dealer to pass on the benefit of GST to the end consumer
The impact of GST on buyers of resale properties is likely to be very little. In the case of under-construction property transactions, buyers have to pay value-added tax (VAT) and service tax. While VAT is a state levy and its rate differs from one state to another, service tax is a central tax charged at 15 per cent. Overall, the current taxes on home purchase are not low and involve mind-boggling complexities.
There are many taxes and duties that a developer pays on the procurement side, such as Customs duty, Central Sales Tax, excise duty, entry tax, etc. These are subsequently passed on to the final pricing of the units and, thereby, to the buyer. As GST proposes to roll multiple taxes into one, the cost of construction will come down.
The actual GST rate on under-construction properties is 18 per cent. However, the effective tax on such properties would be 12 per cent as under the new regime developers will be allowed input tax credits.
The construction of a complex building, civil structure, or a part thereof, intended for sale to a buyer, wholly or partly, is subject to 12 per cent tax with full input tax credit (ITC)
The GST is common hence dont split the facilities for the sake of GST, it is a common charge for all the components
