I have brought a 2BHK flat in Kolkata which costs Rs. 34,000,00/-. The property has been registered in my name as per WB registration laws. Now the builder is asking me to pay GST on the property. He says that total GST on the said property is about 3,00,000/-, out of which I have to pay half the amount and the rest of the amount will be paid by the builder. But nowhere in the Sale Agreement they have mentioned that total price (Rs. 34,000,00/-) is inclusive or exclusive of GST. I want to know that whether I am liable to pay GST as per builder?
And if I have to pay how much should I pay?
You have not mentioned whether you have bought under construction flat or not
Transfer of completed flats, or ready-to-move-in property will not involve any service part to the buyer. Hence, GST will not be applicable in such transactions. Because it is neither supply of goods nor service.
Hence, if you are buying a completed flats or ready-to-move-in property, then you may save the GST cost.
When did you buy the flat ? Was it under construction flat ?
It was under construction property. But nowhere in the Sale Agreement they have mentioned that total price (Rs. 34,000,00/-) is inclusive or exclusive of GST. I want to know that whether I am liable to pay GST as per builder?
You are liable to pay GST as you have purchased under construction flat
- The GST Council approved a transition plan for the implementation of the new tax structure for housing units , and this new GST rates in the real estate industry is effective from 1 April,2019.
- As per this plan, the under-construction properties priced up to ₹45 lakh will now be treated as affordable housing projects and will attract 1% GST without the ITC.
- Further , when an advance is received for a flat before OC, the builder is required to pay GST on advance and need to adjust the same.
- if you are purchasing a property from a builder directly and if payments are made to the builder towards the property prior to occupation, GST would be payable on the amount paid.
- However as per rule, Sale agreement should mention for the same
under GST a single rate of 12% is applicable on under construction properties whereas no GST is applicable on completed or ready to sale properties only if the Completion Certificate (CC) has been issued.
In March 2019, the GST Council cut the tax rates to 5% from 12% on residential properties and 1% from 8% for the affordable housing segment. However, ITC benefits will not be available under the new tax rate policy.
Below are the new tax rates without ITC for housing projects applicable w.e.f 1st April 2019.
Rate
Description
1%
New affordable housing projects
Ongoing affordable housing projects opting for new rates
5%
Ongoing other than affordable housing projects
New other than affordable housing projects
1%
Projects with commercial space <15% of total carpet area
Below are the new tax rates without ITC for housing projects applicable w.e.f 1st April 2019.
Rate
Description
1%
New affordable housing projects
Ongoing affordable housing projects opting for new rates
5%
Ongoing other than affordable housing projects
New other than affordable housing projects
1%
Projects with commercial space <15% of total carpet area
For a property that is under construction, the government has offered relief for property buyers. A tax of 18% is levied on under-construction flats, out of which you are subjected to pay only two-thirds, that is, only 12% tax.
Gst is a govt regulation it's applicable as a matter of law. But if it's not mentioned in agreement you can claim the same from builder to be paid as he didn't mention the same in agreement
Dear Sir
A GST rate of 12% is applicable if the apartment is under construction irrespective of whether it was mentioned in the sale agreement or not.
Thank you
