I booked an under construction apartment in Bangalore, KA from a reputable builder in Feb 2017 before RERA came in force. This apartment was a land owners share. I made 90% of the payment required by Mar 2017, balance payment of 10% and other payments e.g amenities, water, generator charges are pending to be paid at time of handover and possession. Yesterday 8-03-2019 I received a final demand from the developer to pay the balance payment and complete the possession formalities. However, I see now the price have escalated substantially due to CGST and SGST charges added. Now, i see the builder is charging 12% GST on balance amount and 18% GST on amenities and other charges. Please let me know if this is correct as per the current taxation laws? Amount GST Percent On Possession 10% payment 662905 79548 12 Maintenance Charges 42588 7666 18 Amenities & Facilities 150000 27000 18 KPTCL & BWSSB Charges 266175 47911.5 18 Generator charges 75000 13500 18 Reticulated Gas 25000 4500 18 Legal 40000 7200 18
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1) You can ask Builder to wait for one month as from 1st April 2019, the rates are going to implement on CGST and SGST for under construction work.
2) If builder has not completed the construction yet than you can tell him that whatsoever percentage of work he has done that much payment you had already made.
3) New rates are reduce and let check if you can get credit note for what so amount you had paid and if builder had not paid this amount to government than you ask for refund
Yes the builder is charging correctly as on construction 12 percent and 18 percent on amenities is applicable.
18% gst on amenities is correct as per the current taxation law.
The gst for under construction flats is 5%. It will be levied from the effective date. Even if the invoice is old and served now it will be on the new rate. Builder can't take it as per old rate.
Hi,
The GST charges will be as per the law in vogue.
If the GST is charged for the balance amount only then you cannot avoid it.
The charges for amenities may also involve GST, however you may confirm the same from your auditor.
An under-construction property attracts GST at the rate of 18%. But it is not charged on the entire value of the property; it is charged only on two-third of the value. One-third value of the property is considered as the cost of land. According to CBEC, “effective rate of GST payable on purchase of under-construction residential or commercial properties from builder involving transfer of interest in land or individual share of land to the buyer is 12% with full input tax credit (ITC)."
Also, real estate services which do not include transfer of land rights attract GST on the entire amount. According to CBEC, “consideration which doesn’t constitute transfer in land or undivided share of land as part of consideration, such as construction services provided by a sub-contractor to the builder, attract GST at the standard rate of 18% with full ITC."
Developer or service providers are expected to pass on the benefit of ITC to homebuyers, which will eventually bring down the total impact of tax on property value.
Dear Sir,
Please ask your above question on www.taxfull.com which is sister concern of www;kaanoon.com, where is experts will be Chartered Accounts.
