• Need clarity on tax for under construction house

Hi there,

I purchased a flat in June 2017 before GST was implemented.
Below are the details of demand letter and payment.
date of agreement - 10 June 2017. They said that they will give demand letter in June and i can pay in July. They will apply GST on demand letter date and payment can be done in July.

All figures below are in lakhs
1st Demand letter
Demand letter date Date - [deleted] (Payment date - 28 July 2017)	
Flat cost 	45.7
43% amount due	 20.56
Less:- Amt Received 	1
Dues Against flat 	19.56
Total servce tax 	2.05
Less: Received 	0
Dues Against S. Tax	0.93
Total VAT 	0.45
Less: Received	 0
Total Dues	 20.94

There were few demand letters in between from July 2017 - June 2018
2nd Last Demand Letter
Date - [deleted]	
Flat cost 	 45.7
95% amount due	 43.41
Less:- Amt Received	37.46
Dues Against flat	 5.95
GST (Total)	 2.46
Less: Received	 0.54
GST Receivable	 1.64
Total Dues	 7.59

I paid 5.25 L after 2nd Demand letter.

Final demand letter.
Date - [deleted]	
Flat cost 	 45.7
100% amount due	 45.7
Less:- Amt Received	 44.09
Dues Against flat	 1.6
GST (Total)	 5.05
Less: Received	 0.54
GST Receivable	 4.51
Total Dues	 6.81

As you can see GST (Total changed from 2.46 to 5.05)
They are not giving any Input tax credit as well. 
Some more details are on below link

Thanking in anticipation,
Asked 3 months ago in GST from Pune, Maharashtra

- Your contract is based on payment linked. 

- GST came into force on 01.07.2017. Firstly, GST can not be applied on June demand letter. If the payment is made in July 17 then you were required to pay GST@12%. Might be they charged GST@12% from you and paid service tax to the govt.@ 4.5% of 1st installment.

- If you see overall, GST@12% on 45.70 lacs comes to Rs.5.50 lacs which is justifiable. As the first demand letter is of June 17 so GST can not be levied. Also as per demand letter, service tax is levied on 1st installment.

- If you are questioning on ITC benefit transfer then you should have proper working before GST and after GST.

Vivek Kumar Arora
CA, Delhi
2520 Answers
112 Consultations

5.0 on 5.0

I am not able to understand any of their GST or service tax demand.

Firstly they can't charge GST from you on the first demand as they created demand before GST was implemented so they can only ask for service tax on same.

In the last demand the amount of GST might be including service tax amount.

Just ask for proper breakup from builder as it is not proper 12% of the demand.

Also the builder will only mention the GST amount in agreement as the expense is not for business purpose and for personal purpose so you can't claim ITC.

Please ask him to provide proper breakup of GST charged and get a confirmation that he has paid same to government.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
1486 Answers
16 Consultations

5.0 on 5.0

The article only states the rate of service tax and GST but first ask the builder at what rate he has recovered tax from you and what amount of service tax and VAT is included in total GST collected from you.

Naman Maloo
CA, Jaipur
1486 Answers
16 Consultations

5.0 on 5.0

Dear Sir,


Hope you are doing well !!


Please share the break up of service tax & VAT included in GST.

Payal Chhajed
CA, Mumbai
2217 Answers
24 Consultations

5.0 on 5.0

This article is not specify about separate rates and treatment.

Payal Chhajed
CA, Mumbai
2217 Answers
24 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA