I am from Pune, Maharashtra. I am about to purchase residential property which has Agreement Value of, for example 1 Cr for simplicity purpose. The builder project is registered under RERA. As per new GST rules, it rate is 12%. The builder is being generous and is sharing the GST cost by half. That means we will pay 6% GST & builder will pay 6%. I have few queries, about how will the transaction will take place, commercially and legally: 1. Will the 6% GST be mentioned in the Sale Deed Agreement? Is it mandatory to mention GST rate and amount in Sale Deed agreement 2. Will there be cascading effect of taxes? Agreement Value + 6% GST = 1.06 Cr and Stamp Duty payable on 1.06 Cr or 1 Cr? GST purpose to remove that tax cascading, so how will this take place? 3. Will it be legal to show just 6% GST in agreement? Because GST Rules demands 12% value. 4. When will the builder pay the GST contribution to government? What if the builder does not pay the same? In the event if builder does not pay the same, then will government recover it from me? That is how its done in B2B (Business to Business). Will that happen in B2C (Business to Consumer) case too? I should not be held responsible in the event, the builder does not pay the same. 5. The way I get Receipt for paying the Stamp Duty, what proof I will have to show that builder has paid the GST? 6. What would be my reasonable expectation from the builder in this scenario? 7. Whether rate of 12% GST as confirmed by Builder, is correct for Residential property? 8. How this GST amount will go from buyer to builder to government? Ideally builder should raise an invoice to buyer showing separate SGST and CGST, right? 9. In this situation how my interest will be safeguarded? What precaution I will have to take while dealing with builder before making the Final Sale Deed?
1) ideally you should purchase flat after issue of OC
2) no GST would be leviable in such a case
3) GST payable by you should be mentioned in agreement
4) it should be mentioned that builder will pay balance 6 per cent
5) there should be clause in agreement that in case builder fails to pay his share of GST agreed to be paid by him builder would be liable to pay said amount with interest
6) get your agreement vetted by a lawyer
It is not mandatory to mention GST rate in the sale deed instead of it you can mention total sale amount including GST.Stamp duty will be levied including GST, however you can share taxes with owner but have to pay stamp duty as applicable according to Circle rate.You can mention in the sale deed that half of the GST will be shared by owner. If this fact is written in the sale deed then builder is bound to pay 6% GST to the government.
When you purchase stamp from the revenue department then you will get a receipt. When you mention that half of the GST tax is beard by the Builder then this is an evidence that GST is equally shared by the Builder and you.
1. Not necessary to mention the GST amount specifically but the total sale consideration mentioned in the sale deed will be inclusive of GST.
2. 1.06 crores will have to be mentioned in the Sale Deed.
3. Entire 12% has to be shown on the agreement. It is just that the burden of tax is being shared by the builder, hallf of the total tax implication.
4. he will give you an acknowledgement of payment of tax in govt. treasury.
5. Separate acknowledgement will be given.
Hello,
1. It may not be mentioned in the agreement.
2. The Stamp Duty shall be payable on the property value and not property value plus GST.
3. The agreement may not specify the percentage as it may change at any point of time if revised by the government.
4. You have nothing to worry about it as it is the builders responsibility to collect it from you and pay it to the government. The government will not catch hold of you.
5. Please refer answer to point no.4.
6. Please refer answer to point no.4.
7. Yes, the rate is correct for under construction property.
8. The amount is payable slab wise and the builder will send to a notice to pay the slab wise payments which will include the GST component for that very slab.
9. Please refer answer to point no.4.
1. The entire thing will be mentioned as sale consideration amount however the GST may not be calculated for the purpose of stamp duty.
2. read the above answer.
3. The full availability of input credit as compared to current regime (where input credit is not available on excise duty paid on certain raw material inputs) is expected to be beneficial for reducing project costs under the GST system,i.e., the current tax regime, works contract attracts a service tax rate of 6 percent which is a reduced tax rate under a special scheme known as the abatement scheme and a value added tax or VAT that currently ranges from 1 to 5 percent depending from state to state. While paying these taxes today, developers do not get a deduction of the input tax but under GST they will. This means that on the amount of excise duty and VAT they pay on cement or steel, no set off is available to them but under the new GST regime, developers will be able to get benefits on taxes.
Thus it will be adjusted in the papers on the basis of their adjustment towards other taxes
4. The builder if collected GST also from you, the receipt or evidence of this will be in your possession which will support your defence.
5.You dont worry about it, it is the head ache of the builder.
6. The builder should provide the details
7. Yes
8. What is your concern about this, the builder have to follow the laid down procedures in this regard.
9. Consult your lawyer before ,making the final sale deed executed and registered, in case you still have doubts on it, at that stage.
