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GST for under construction property is not revised to 5% by builder in Bangalore - citing reasons
TO WHOMSOEVER IT MAY CONCERN NEW GST SCHEME FOR RESIDENTIAL PROJECTS 1. GST on residential projects from 1 July 2017 to 31 March 2019 (Old Scheme) before issuance of GST Notification 03/2019 - Central Tax (Rate) dated 29 March 2019 GST on residential apartments when sold under construction has been as under (up to 31 March 2019): a).12% for other than affordable housing - including land value b). 8% on affordable housing projects - including land value Under the Old Scheme, the Developer was eligible to avail Input Tax Credit (ITC) of GST paid on purchases and utilize the same on sales. Therefore, the developers were not considering GST paid on inputs as 'cost' while fixing the base price of the product since it was available for set-off from the output GST on residential projects effective from 1 April 2019 (New Scheme) after issuance of GST Notification 03/2019 - Central Tax (Rate) dated 29 March 2019 The Government has notified revised GST rates of 5% on the selling price (for other than affordable housing) and 1% on selling price (for affordable housing – the cost being within INR 45 lakhs, and the carpet area being upto 60 sqmts. for metro cities/90 sqmts. for non-metro cities). According to this: 1). The revised GST rates are mandatorily applicable on New Projects commencing on or after 1 April 2019 2). For ongoing Projects (buildings where construction and actual booking have both started before 1 April 2019 and the project has not been completed by 31 March 2019), Developers have the option - to either continue with earlier GST rates (for sales/bookings already made and to be made), or charge GST as per New Scheme. 3). The Developer will not be eligible to avail any ITC under the New Scheme resulting in cost-push effect
Asked 6 years ago in Property Law
Religion: Other
5 Answers
Apologies for not raising the question..My question is builder is asking me to pay 12% gst ...since he has opted for that ....is it true that CREDAI gives an option to the builder to choose the tax slabs?
Asked 6 years ago
Builder has been given option to to continue with earlier GST rates or charge GST as per new rates
Yes the builder under new notification can opt for the old scheme if the project already comenced and it is ongoing. The notification scheme provides such option.
The new rates will be applicable from date as per date of your payment terms. If you are making payment after the effective date then the new rates will be applicable
The rule is very clear and the same has been reproduced by you properly.
Th CREDAI has nothing to do in this.
The builder cannot ask you to pay 12% GST when it is clear from the latest amendment tht the GST is chargeable at the rate of 5% only.
You may refuse to pay extra amount citing the new rules, let him quot his own rules which can be challenged properly based on the prevailing circumstances.
