I booked a flat in Dec 2016 and paid 20% of the consideration upfront. However, no agreement to sale has been executed till date on account of delay by the builder. The advance of 20% was paid basis the booking form (which is not a contract). Further, no invoice etc has been raised till date. Now the OC has been received by the developer in March 2018. The agreement to sale is being executed now. However, the builder is of the view that GST would be applicable in this case regardless of whether the agreement has been executed or not. Further, the developer follows the system of executing two agreements i.e. one for agreement to acquire undivided share and another for construction of the flat. I understand that the advance of 20% is applied towards land. In the given case, I am of the view that GST would not apply since no invoice/contract etc has been executed till date. Further, the 20% advance has been applied towards land and hence, in the absence of contract, it can be concluded that the apartment is being sold after OC and hence, there is no GST. Please advise.
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1. The OC has been obtained by the developer after 1.7.2017 for which all the transactions to be made after 1.7.2018 shall attract payment of GST.
2. Agreement for the land can be made for 40% of the total agreed amount on which NIL GST shall be applicable.
3. You can show the 20% payment made by you as towards payment for the building made before 1.7.2017 on which service tax will be applicable.
4. So, you shall have to pay GST on the balance 40% of the total agreed amount.
Sir GST has to be paid on the remaining 80 percent of the amount as you have paid 20 percent consideration before the july 2017, so the GSt shall be applicable for remaining amount, on under construction flat for which full consideration is not paid before 1 july 2017 there shall be GST of 12 percent on the remaining amount.
The rate of GST on an under-construction property is 18 per cent. However, one-thirds of the value of the consideration is presumed to be the value toward cost of the land, in cases where the interest in the land is also supposed to be transferred. So, effectively, the GST rate, in such cases, is 12 per cent, on the entire agreement value.
So if you consider 20 percent as towards land then in that case you can deduct the total interest in land from agreement value and from rest amount you have to pay 18 percent GST by deducting further amount paid towards land. But interest in land cannot be more then 1/3 of total value. So in simple on construction amount you can pay 18 percent GST further since OC given after 1 july you will be liable to pay GST.
Apartment was sold to you in December 2016
2) 20 per cent of amount was paid by you .
3) merely because agreement is entered into later it cannot be concluded that flat is sold to you after issue of OC
4) builder is correct that GST would be applicable
GST will not be applicable for ready-to-move-in properties.
After The Completion Certificate Was Issued To The Builder, GST will not be applicable as it is considered a ready-to-move-in property and there is no transfer or supply of goods and services.
However when the payment of consideration amount is taken into consideration, you may have to pay the same as applicable.
Firstly There was no gSt on land AS IT IS IMMOVABLE PROPERTY and gSt is applicable on construction part as it is movable property
Next if the builder doesn't raise the bill there is no need to pay GST.
WITHOUT RAISING BILL THERE IS NO NEED TO PAY GST AS THE CONSEQUENCES SHOULD FACE BUILDER ONLY
