Hello,

Is it an individual flat or some unit in a housing Society?

However, I would not advise you to do any such activity in order to avoid the tax imposed by the government. Moreover, if you enter into any agreement in relation to this it will be a void agreement since the same happens to be in violation of public policy.

Entering into any such agreement without any paper work is also not advised.

Regards

I'll not advise you to follow the course suggested by the builder.

If you will go ahead with his advice, you will not be in a position to sue him in case there arises any dispute in future(just in case), for you'll no have any agreement/or any other formal document evidencing that you are an allottee in his project.

The better course is that you pay the GST component and go ahead with entering/registration of all the necessary documentary and agreements. This approach protects your investment in the project.

1) once OC is issued and building completed as per sanctioned plans no GST is applicable

2) don’t make any payment to builder now

3) if you make payment for purchase of under construction flat then insist on registered sale deed be executed in your favour

4) you will have to pay GST on under construction flat

Hi

1) As per Para 5 of schedule III of the CGST Act, 2017, any payment made by the buyer to the builder on or after 1st July, 2017 against invoices issued on or after 1st July, 2017 shall attract GST @ 12% for an under construction property.

2) Unfortunately, the developer seems to be ignorant of GST rules( which is very common given the prevailing GST Confusion) or alternatively the developer might be banking on a loop hole in GST which says GST not applicable on second sale of apartments(i.e developer must have already sold the under construction property to some one else and in turn that person will be making a resale to you).

3) From your query, we understand that your developer has neither completed the flat nor is in possession of occupancy certificate issued by authorities. So, technically for any payment made by you to your developer on or after 01 July 2017, the same shall be subjected to 12% GST with Full Input Tax Credit available to you

4) Before making payment ask your developer the following:

a) Whether the developer is entering in to 2 sets of agreements with you i.e 1 agreement for sale of land along with undivided share of land and another agreement for construction. If so you need to pay GST at the rate of 12% with full input tax credit only for construction agreement.

b) Whether the developer will enter in to a construction agreement with you with an all inclusive rate per square feet and also mention specifically the stage wise payment required to be made you ?

c) If the developer will accept at least 70% of payments from you through your bank and issue receipt thereof.

If the Developer answers all of the a, b and c queries in affirmative, you can go ahead with the purchase.

Hope this information is useful.

1. Any payment made by the buyer to the builder on or after 1st July, 2017 against invoices issued on or after 1st July, 2017 shall attract GST @ 12% for an under construction property.

2. If you need to pay the GST then make the builder execute an agreement for the sale of undivided share of land along with construction agreement in your favour.

As per the GST act ,No GST is applicable on ready to move in flats and a 12 % GST is required to be paid by the purchaser in the event he procures an under construction property .

However It is advisable that you either purchase the property when it is ready or pay 12 %GST for an under construction property. In order to save yourself from paying GST you might entangle yourself in a bigger legal complication.

The Builder Buyer agreement is of paramount importance is such cases .Don't proceed forward without executing the same .

Firstly, I advice you to not to go by his words who knows what he will say in future about your payment.

Secondly, if you are paying through bank loan then firstly it should be transferred to your name on KY then would get bank loan.

Thirdly. If still want to pay then pay by bank transaction.

Hi, not legally but you may enter into an agreement with the builder mentioning various facts including that you are paying for the purpose and the same would be registered later. Further, the ask the documents of having chain of transfers and the builder's right in the property.

The developer may suggest plenty of loopholes to avoid taxes.

You should consult a tax consultant or a lawyer before agreeing to his proposal

Also besides title and title link documents, the development agreement and other relevant papers in respect of this project may be vetted through a lawyer.