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  • GST for flat cancellation

Hi,

I had booked an apartment in Bangalore on 31st August 2019 by paying Rs 5 lakhs as advance. However, we cancelled the booking on 5th November 2019. The builder had clause of deducting Rs 2 lakh. Now the builder is also deducting GST @18% and stamp charges. Is this valid?
Asked 6 years ago in Property Law
Religion: Hindu

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10 Answers

See if builder has already deposited the GST amount with government then in that case he sha deduct same along the agreement charge. So ask for challan from.builder for GST.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Don`t show your willingness to cancel booking. But impose reason of cancellation on builder, full refund. 

Where the allottee proposes to cancel/withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. so Builder is entitle to deduct 10% of property cost. 

Since deal did not materialize, no service and product purchased, no GST payable, complain to RERA. 

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

Builder is now bound to refund gst on cancellation of flat.

complain to gst authorities or RERA in this regard and seek appropriate order.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

In case of cancellation of booking builder can deduct 10 per cent of booking amount 

 

2) in other words builder cannot deduct Rs 2 lakhs 

 

3) in case of cancellation of booking 

Builders will have to refund GSTpaid by home buyers in case he cancels the flat booked in the last fiscal and will be allowed to avail credit adjustment for such refunds, the tax department has said.

 

 

 

4) developer will be able to issue a 'Credit Note' to the buyer as per provisions of Section 34 in case of change in price or cancellation of booking.

"Developer shall be able to take adjustment of tax paid in respect of the amount of such Credit Note,

Ajay Sethi
Advocate, Mumbai
99782 Answers
8145 Consultations

you can challenge the same in RERA or consumer court if found arbitrary

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

Dear Sir,

No, it is not valid.

Builders will now have to refund GST on cancellation of flat booked in the last fiscal, I-T dept said. ...  Builders will have to refund GST paid by home buyers in case he cancels the flat booked in the last fiscal and will be allowed to avail credit adjustment for such refunds, the tax department has said.

Builders will have to refund GST paid by homebuyers in cases where they did not to go ahead with the purchase of flats and cancelled the booking during the last financial year ended on March 31, 2019, the tax authorities clarified on Wednesday.

Netravathi Kalaskar
Advocate, Bengaluru
4951 Answers
27 Consultations

For what purpose he is deducting 18% GST, what type of services or goods he had provided to you.

 

If the agreement is not registered than what type of stamp amount he is asking.

 

Don't give 2 lakhs also as per RERA only 15% of earnest money builder can deduct the amount, means only 75k seventy five thousand and not more than that.

 

Kindly make complaints in the RERA and Consumer Forum of your city.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

Deduction of this huge amount out of your booking amount is totally unjustified and contrary to the prevailing law in this connection.

You may approach RERA for solution and relief against this injustice meted out to you.

The new Real Estate Regulation Act (RERA) will enable home buyers to exit real estate deals smoothly.

The builder is also bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.

Builders will have to refund GST paid by home buyers in case he cancels the flat booked in the last fiscal and will be allowed to avail credit adjustment for such refunds

A home buyer might want to exit a project for a variety of reasons. An emergency may have forced them to do so or they could simply have got tired of waiting for the project to finish. However, you cannot exit the project without undergoing a monetary dent in most cases.

T Kalaiselvan
Advocate, Vellore
89984 Answers
2492 Consultations

Builders will have to refund GST paid by home buyers in case he cancels the flat booked in the last fiscal and will be allowed to avail credit adjustment for such refunds

You have better option to file a complaint before the consumer Court. 

 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

Builder cannot charge GST and stamp duty because sale agreement have not been executed.

You should send him a legal notice through your advocate for refund of money without GST and stamp duty. If he refuse to pay even after notice file case with consumer forum.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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