Hi, In this case Land owners ( 3 brothers got ancestral 1 acre land) entered into JDA with Builder in 2014-15. Apartment is still under construction as of now and builder says we may get Completion Certificate in December 2019. I entered into a sale deed with one of the "Land owner" as all 3 brothers got 45% ( 15 each) of flats. I bought 1 flat from 1 land owner entered into agreement in October 2018 and registered sale deed in February 2019. While Landowner said GST not applicable on the flat being sold to me while selling it last year, Now landowner called me and asked me to pay GST extra. I do not think landowner have any GST number. 1) But i want to understand why this came into picture now in April 2019 after completing registration in Feb 2019 and waiting for possession. 2) Does it have anything to do with old tax regime VAT / Service tax. 3) If builder asks land owner to pay GST, can he pass on to me at this stage after registration ? 4) If GST is applicable then how much ?
Have you paid any consideration to the Land owner. If no then dont pay it till you receive completion certificate to save GST.
If you paid some amount at the time of registration and before receiving completion certificate then GST will be applicable at the rate of 12%.
Yes in earlier indirect tax regime no tax was applicable on buyers share.
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Thank you.
I have paid full amount before registration. The Final absolute Sale deed says - " for a total sale consideration of Rs.... ../ inclusive of taxes, deposits and amenities , facilities provided by developer" Since already its mentioned clearly that the Sale deed value is considerate inclusive of everything, do i still need to pay GST extra at this point after registration ??
Actually according to Indian contract act if there are any liabilities which arise due to change in tax structure then a person is allowed to charge that extra amount from the buyer.
But this is a point of debate you file a court case against him if you feel this is not correct and you want to fight.
However there is a defense to his side also as mentioned by me earlier.
Hope this helps.
Hello,
GST is applicable, when the flat, is sold before its completion and the consideration, whether in full or in part, is received before its completion.
So GST is applicable in your case since you have made payment before the completion certificate. You must ask for a tax invoice with GST No. of the landowner.
The builder must have also charged GST on its construction services to the landowner.
GST rate would depend upon the landowner/builder selection of the one-time option to charge Old/New rates on under construction property.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
As the sale was done in the GST regime and before obtaining CC therefore GST would be applicable @12% but you can take the plea of the following clause in the sale deed. Nothing to do with old regime i.e. VAT/service tax etc.
The Final absolute Sale deed says - " for a total sale consideration of Rs.... ../ inclusive of taxes, deposits and amenities , facilities provided by developer"
Hi
Yes, GST was applicable on the flat sale as it was sold while under construction. It might be because the land owner wasn't aware of such chargeability earlier.
But, since your sale deed had specific clause so as to include all taxes, the land owner cannot bind you now.
Hi
If Sale has been done before completion ,then GST is to be paid @12%.
But as shared clause says Sales consideration is inclusive of all taxes,you can fight on this basis and can escape GST payment.
Hope it helps
Hi,
Hope you are doing well !!
Yes, GST was applicable on it as it was sold under construction .
Goods and Services Tax (GST) is applicable on sale of under-construction property or ready to move in flats where completion certificate is not issued at the time of sale
However, you can take the benefit of below clause:
The Final absolute Sale deed says - " for a total sale consideration of Rs.... ../ inclusive of taxes, deposits and amenities , facilities provided by developer"