Hi, it is advisable to mention the GST in the agreement to sale apart from the sale consideration
GST on independent builder floor
Hi, I am purchasing an Independent floor from an individual. The Floor is being constructed by the individual on a plot of Land he himself owns. 1. Is GST of 12% applicable in this purchase. Since the transaction is between individuals 2. I am only paying him an earnest money and signing an agreement. The rest of the amount will be paid only after CC/OC on the day of registration of the property. Will it still be considered as purchase of an under construction property? 3. The owner of the Plot has agreed to add a clause in the agreement - that the final cost is inclusive of all applicable taxes. 3. What would be my liabilities if the transaction indeed attracts GST of 12% and the owner fails to submit the amount to the government. How can i safe guard myself?
Asked 7 years ago in Taxation
First answer received in 30 minutes.
Lawyers are available now to answer your questions.
6 Answers
1. No
2. Yes it will be considered as a purchase of under construction property.
3. It is his liability to pay (if at all), if he is mentioning that all kind of taxes have been taken, then you have already safeguarded yourself.
Regards
1) you are purchasing under construction property GST would be applicable
2) the Seller is bound to levy GST, Collect the same from the CUstomers and remit it to the Government on or before the respective due dates.
3) 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.
If the owner of the property comes under the developer as per the new regulation for real estate development then he has to get GST registration and registration in real estate regulator in this regard and in that case the GST will be applicable for this sale.
The inclusion of clause that the final cost will be inclusive of applicable taxes is good to be transparent on taxes.
GST at the rate fixed for under construction flats are applicable to your case becasue you are entering into an agreement before the construction begins.
If the applicable GST has been collected from you and you are given with an acknowledgment for that by the seller, then you need not worry about whether the vendor is depositing the same with the government or not, you have an acknowledgment for having paid the same, hence you will not be held liable for non-payment of the same.
whether the seller is a builder or an individual, if that person is making construction on the land then he is providing construction services on which GST will be applicable
once OC/CC is received for the construction then no GST will be payable
so it will be prudent if major chunk of consideration is paid to seller on receipt of OC/CC because you wont have to pay GST on it
once you pay the GST your liability ceases. Then it will be only on the owner to deposit the GST collected from you with the government treasury
you can take a tax invoice from seller in which his GSTIN must be mentioned
