• Reduced GST rate of 8%

Dear CA Experts,

I have gone thru this form and few links about reduced GST from 12% to 8% for under construction home.  

On Jan 10th i have entered agreement with builder & registered an under construction flat.  I have paid almost 95% of the flat cost to builder which includes 12% GST.  This announcement from GST council has come effecting 25th Jan.  

Now my builder says reduction of this GST applies only for the remaining amount (ie 5%) but nothing would be reversed for the amount which i paid earlier (10th Jan)

Is this statement from builder is true? GST paid cant be reversed now? 

Need your experts opinion before i take any legal action against builder, please suggest. 

Thanks in advance. 

Balakumar N
Asked 6 years ago in GST

GST liability arises at the time of supply. Time of supply in case of services is Receipt of Payment or Date of Invoice whichever is earlier.

Since you have paid 95% amount before the change in rate therefore that amount will be subject to 12% rate and not 8%. Builder is right in this case.

Brijendra Tripathi
CA, Lucknow
143 Answers
3 Consultations

5.0 on 5.0

Yes builder is correct

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

GST is levied on the on the date of payment or supply of services whichever is earlier. In your case payment made before 25th and 29th therefore your are liable to pay GST @12%

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

The builder is correct here. 12% rate would be applicable as payments were made before such rate change.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

Hi,

Please note that reduced rate of 8% were made applicable w.e.f. 25.01.2018 only. Any transaction done prior to the same shall not be covered in the same as that is not explicitly mentioned in the notification.

Further, if builder has already charged GST on your amount @12% and paid the same to the Govt. before 25.01.2018, there are no provisions prescribed for refund of that amount to the builder till date. As such, it is unlikely that builder will pass on the benefit to you till the time there is certainty of any refund from the Govt. to the builder.

There is an option available to you. If the builder has collected the amount from you but has not yet raised any invoice on you or not paid the amount to Govt. (which is very unlikely), he may like to transfer the benefit to you.

However, any amount taken by him after 25.01.2018, he will compulsorily have to pass on the reduced GST benefit to you, else, you can complaint against him with the local jurisdictional commissioner.

Regards,

Sunny Thakral
CA, Delhi
224 Answers
8 Consultations

5.0 on 5.0

Since amount has already been paid before notification date ,so you have to bear 12% gst.

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

In my opinion you are not eligible for reduced rates.

Brijendra Tripathi
CA, Lucknow
143 Answers
3 Consultations

5.0 on 5.0

Reduced rates will be available on only balance payments pending.

Brijendra Tripathi
CA, Lucknow
143 Answers
3 Consultations

5.0 on 5.0

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