For PMAY beneficiary => GST rate on property purchased in May 2018 => 8% or 12%

For PMAY beneficiary => GST rate on property purchased in May 2018 => 8% or 12%

Hi,

I booked my flat in May 2018. Since it was an under construction property, I was charged 12% GST by the builder at the time of booking. However, we had applied for PMAY and it was informed to builder. We received our subsidy in January 2019.

I spoke to builder on the subsidy and explained that the GST rate should be 8% in my case - as we received PMAY subsidy. However, they are saying GST rate applicable will be 12%.

My understanding of 8% is based on government announcement in January 2018 which was followed by GST notification in Jan 2018.

Please let me know what rate should be applicable in this case. Also what are my legal options if builder is forcefully charging 12% GST?

Ravi

Asked 4 years ago in GST

Dear Sir,

Hope you are doing well !!

The concessional rate of GST of 12 percent (effective rate of 8 percent after deducting one-third of the amount charged for the house towards the cost of land) is applicable for houses constructed or acquired under the CLSS for Economically Weaker Sections (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY Urban).

If your house falls under above categories then the rate is 8% otherwise 12%.

Payal Chhajed

CA, Mumbai

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Thanks for quick response Payal. If builder is not agreeing on 8%, what are my options legally ? How do I get additional 4% back ? Request your inputs on the same.

Asked 4 years ago

It is advisable to take a phone consultation for detailed discussion.

We may assist you for the same.

Payal Chhajed

CA, Mumbai

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Is his project eligible for PMAY?

I think receiving loan under PMAY and flat/ project registered under PMAY are two different thing so please first check that.

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

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The concessional rate of 8% is applicable if you buy or construct house under CLSS of economically weaker section or LIG / MIG 1/ MIG 2 under the housing of PMAY.

If you acquired house as per above scheme then the concessional rate will be applicable.

Karishma Chhajer

CA, Jodhpur

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In case builder do not agree with this then share your legal documents with Us.

We can assist you.

Karishma Chhajer

CA, Jodhpur

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Thanks for your responses. I spoke to the builder multiple times on this in past few months. Finally, he came back after consulting his CA that the rate applicable would be 12% only. Rational is his apartment scheme is not registered for PMAY.

Question now is, if the apartment scheme is not registered under PMAY then shall I be charged 8% GST if I'm a PMAY beneficiary?

Thanks Ravi

Asked 3 years ago

No, you can't charge 8% on the same as apartment scheme is not registered for PMAY.

His CA is correct. The applicable rate would be 12%.

Payal Chhajed

CA, Mumbai

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