Yes he can ask 12% but on the remaining payments. Also ask for the Tax invoice. If you have any complain about ITC benefit, you can go to anti-profiteering committee.
Booked an apartment in under construction before GST regime
Dear sir I had booked an apartment in under construction building on aug 2016 with conditions set as basic value 60 lakhs + tax as applicable . I did pay 5.5 lakhs before GST came in to effect and balance I paid after GST effect to builder on April 2019 when GST revised to 5% he had not issued me any invoice we only have a sale agreement with value 60 lakhs mentioned without any clause of tax applicability. Now he has been asking me to pay 12% because he said he has been given option by gst department to either go with 12 or 5% regime as his scheme was launched before GST and he right to ask 12% nor he wants to pass the benefit of GST
Asked 6 years ago in GST
Dear Sir,
Hope you are doing well !!
For the ongoing projects, builders have been given the option to either continue in 12 per cent Goods and Services Tax (GST) slab with ITC or opt for 5 per cent GST rate without ITC.
“Ongoing projects” means projects where construction and actual booking started before April 1, 2019, but which was not completed by March 31, 2019.
In your case, the new rate is apply only if bulider had opted the option of new rates.
Otherwise, you will be liable to pay GST as per old rates.
However, for pending installments, new Gst rate will be apply subject to conditions.
Hi,
Yes, builder is correct for asking 12% GST.
For ongoing residential projects, the builders had an option to choose (Before 20th May 2019) either the new scheme or continue charging the old rates of GST.
However, for house booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
Dear madam 5.5 lakhs was paid in 2016 when i booked in the project . In 2017 the builder said that i was liable to pay 12% gst with effect from July 2017. Balance 48 lacs i paid by loan in april 2019 which he said will be liable for 12% gst instead of 5% as his project is ongoing project and govt has given him 2 option for going either with 12% or 5% and he has selected 12%. now i have to pay another pending 6.5 lac installment and also to confirm with him gst to be paid on total amount as per the applicability .
Asked 6 years ago
Dear Sir,
- You have given me poor rating which is very poor. My answer is in line with all the other experts.
- If the builder has not availed the option of 5% then he will continue with the old rate @12%. In the option 5%, builder is not eligible for the ITC and he has to purchase the 80% of the inputs from the registered persons otherwise he will compensate the difference. In the option 12%, ITC option is available with him. Therefore, most of the builder is opting for the 12% option. Your project is payment linked instead of construction linked. In case of payment linked plans, builder is liable to collect GST as and when the payment is due. The option of 12% is available to the builder and not to the home buyer.
Thanks
so should i pay 12% also on payment 48 lac done in 30th april 2019 and 6 lac which will be done in august 2019 and i guess completion certificate will be around October 2019
Asked 6 years ago
Dear Sir,
As per GST rules, the GST is payable on the earliest of three occasions:
- Receipt of payments
- Raising of invoice
- Completion of service/supply of goods.
So, if you can get the developer to issue the invoice/demand for the remaining instalments, on or after April 1, 2019, you will be able to avail of the reduced rates of GST.
However, the developer may not be willing to accommodate such requests, as this involves delay in receipt of money for him, as well as losing the benefit of input tax credit on the instalments subjected to the reduced rates of GST. In genuine cases, where the due date of the instalments fall after March 31, 2019 and the builder does not play mischief by raising the invoice before this date, you will be able to get the benefit of the reduced rates.
Otherwise, you should pay GST@12% on both installments (i.e. payment 48 lac done in 30th April 2019 and 6 lac which will be done in august 2019).
Yes your builder is correct that for ongoing project government had given them option to choose between 12% and 5%.
However you can ask him to provide you the declaration that he is covered under 12% which all builders were required to submit till 10 may if they choose 12%.
If he would have chosen 5% he would not be able to take credit of input tax and this would have increased your cost and you would pay 5% on such increased cost which in turn would result the same.
You need to pay 12% GST on all installment paid after GST came into effect.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Yes, your builder is right about the option to select one rate either 12% or 5% without ITC for ongoing residential projects as on 1st April 2019.
Since he has selected the 12% option, you are liable to pay 12% on the remaining amount.
If you think he has not passed on the benefit of ITC after coming in to force of the GST, you can use the anti-profiteering provisions against the builder.
You should ask for the invoice for each payment made to the builder inclusive of GST.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Yes, you would be liable to pay 12% on both amounts.
Completion certificate has nothing to do with that.
Yes you need to pay 12% on 54 lacs.
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