Sir as clarified by the circular of the GST council the GST of the 12 percent has to be paid on the construction services further the builder shall provide the benefit of ITC to the other party if no benefit of ITC is provided you an complaint to the anti profiteering authority can be made.

ensure that the Input Tax Credit (ITC) benefits received by the builder are passed on to the buyer as well. Builder are expected to follow through with this, because of the anti-profiteering provision in Section 171 of the GST Act. The objective of anti-profiteering is to ensure that the benefits derived under GST, if any, should be passed on to the end user. Homebuyers however remain doubtful, even as the government is doing everything possible to ensure that builders pass on ITC on construction materials and services available under GST to homebuyers, with the hope to make housing more affordable.

The Government to ensure that businesses do pass on the entire benefit of lower tax incidence, including ITC to the consumers, has set up a five-member Anti-Profiteering Authority for GST. The authority, to be headed by a retired secretary-level officer, can take suo motu action, besides acting on complaints of profiteering. The authority will operate for two years before any changes and will decide on the various penalties to be levied. The primary duty of the authority would be to make businesses refund the price reduction on a proportionate basis to consumers.

The amount of GST collected by the Builder must be deposited to the GST department before the due date he has to account for that amount and issue invoice against the GST collection on the basis of invoice you can claim ITC

This is my response to you:

1. If you have paid the GST ask for the invoice/receipt;

2. You have all the rights to ask for the same;

3. Ask the builder to bifurcate the amounts being paid;

4. If he does not respond well then make him speak to your lawyer/CA.

1.this is a very tough question

2. there is no proper guideline from the government also

3. when a builder purchases construction materials, he purchases them in bulk from different vendors and he has to pay GST under the tax invoice raised by his vendors

4. then the builder uses the purchased construction materials and incorporates them in the flats which we constructs in the new building

5. when this flat is sold to a flat purchase, the builder charges GST from the buyer

6. now the GST charged by the builder is on 2 different accounts - one on the goods which are incorporated in the flat which leads to their value addition and second on the construction service which the builder provides to the flat buyer

7. now you can see that it is very difficult to bifurcate the goods and services component from the GST charged by builder from the flat buyer.

8. also the builder has to ascertain the exact amount of goods (which he bought in bulk from his vendors) which are incorporated in your flat and has to arrive at its proportionate input cost and the pro-rata GST on that cost

9. then when once the above segregated goods are incorporated into your flat, the builder has to ascertain the value addition made to those goods as a result of their incorporation into your flat and then segregate that value from the cost of the flat at which he sold the flat to you

10. all of this requires complex calculations and there is no standard computation given by the government

11. so the builder is given an upper hand to make his own calculations for refunding to the flat buyer the proportionate ITC availed by the builder

12. as this is a complicated topic, one has to approach the court by filing a Writ Petition seeking direction to the competent authority responsible for GST collection to come out with some easy formula by which the builder has to give benefit of ITC to the flat buyers and also the time frame within which the builder has to make this payment to the buyer

13. there is no other way out.

14. for the time being you can raise the above query to the GST Council by filing a RTI application

Dear Client,

A person committing an offense with the deliberate intention of fraud, becomes liable to prosecution under GST, i.e., face criminal charges. For eg.

-- Issue of an invoice without supplying any goods/services- thus taking input credit or refund by fraud

We have paid GST 12 percent on semi constructed house. What we have to do if the builder takes his own time or not ready to pay ITC on GST . Please clarify.

Paying ITC is not your problem.

If he is not paying ITC or the GST collected from you then he will be held liable for the legal consequences.

You may obtain a receipt for collecting the GST from you along with the acknowledgment for sale consideration amount.