Slab of GST applicable

Slab of GST applicable

Sir/Madam,

I had booked an under construction flat at North 24 Pgs, West Bengal in November 2018 by paying 1.5 lakh as down payment. Then applied home loan from lic hfl and the first disbursement was made vide a cheque dated 27.03.2019 to the builder for 16.22 lakh. The final disbursement was made on December 2019 for 6.63 lakh. The builder has charged me 2.19 lakh as GST. He showed percentage as 12% for 1.5 lakh plus 16.22 lakh and 1% for 6.63 lakh in the tax invoices. I am facing a big financial problem due to this huge amount of GST. As I am aware that the slabs of GST has changed wef 01.04.2019 and the cheque date was 27.03.2019 (lic is showing as 30.03.2019 in their portal) for my first disbursement. But the cheque has been encashed in April 2019 in builders account. Now my question is, which date and what slab will be eligible for GST calculation in my first disbursement case of 16.22 lakh. Is there any way to get back some refund? Please help me with your valuable comments.

Thanks & Regards
Abhijit Kundu

Asked 5 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 (8 per cent for affordable housing), or opt for 5 per cent GST rate (1 per cent for affordable housing) without ITC and communicate to their respective jurisdictional officers the same by May 10.

"The date for exercising the option for residential real estate project to either stay at old GST rate (8 per cent or 12 per cent with ITC) or to avail new GST rate (1 per cent or 5 per cent without ITC) was extended to May 20, 2019 from May 10, 2019,"

Ongoing projects have been referred to as buildings where both construction and actual booking started before 1 April 2019 and which have not been completed by 31 March 2019. The option has to be exercised once within prescribed time frame.

Firstly, you need to check with the builder the he had opted the option or not.

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

We have handled such cases before. We may assist you in entire procedure.

Payal Chhajed

CA, Mumbai

5189 Answers

303 Consultations

Talk to Payal Chhajed

The first installment was due before the rate change and cheque was also issued in March only.

Since the first disbursement was made in the month of March, GST shall be applicable @12%.

For payments made after 1 April 2019, check with the builder if he has opted for lower rate of 5%.

Lakshita Bhandari

CA, Mumbai

5687 Answers

943 Consultations

Talk to Lakshita Bhandari

If he has charged GST at 1% later then in that case I think its a house under PMAY and in that case he should have charged GST before also at 8% and not 12%.

GST needs to be charged at payment or service whichever is earlier. Since payment was made before 1st april old rate shall be applicable even though same was encashed later.

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

4306 Answers

101 Consultations

Talk to Naman Maloo

Dear Sir,

For determining the Gst applicable Tax Rate, We will the consider the date on which the Cheque is issued, since the cheque is issued before 01.04.2019, so the applicable rate will be 12%. Hence, can not claim any refund.

Thanks & Regards

Shiv Kumar Agarwal

CA, Delhi

489 Answers

74 Consultations

Talk to Shiv Kumar Agarwal

On your disbursement GST shall be applicable@ 12%.

After 1 April 2019 builder has two option. So you need to check with builder which option has been opt by him.

Karishma Chhajer

CA, Jodhpur

2452 Answers

29 Consultations

Talk to Karishma Chhajer

Hello,

Since the payment was made before the rate changes, the older rates of 12% would be applicable.

For the final disbursement, kindly check with the builder whether he has opted for the lower rate.

I hope this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Hunny Badlani

CA, Madhya Pradesh

2608 Answers

16 Consultations

Talk to Hunny Badlani

Thanks a lot to everyone for the replies!

It is clear to me that the GST slab for first disbursement i.e. 27.03.2019 @12% and the final disbursement i.e December 2019 @ 1% are correct. However, am I eligible for the benefit for ITC @4% for my first disbursement of Rs. 16.22 lakh and own contribution of Rs. 1.5 lakh, which were made before 01.04.2019? If yes, where shall I claim refunds for ITC @ 4%? If builder denies for ITC, what should I do?

Asked 5 years ago

Dear Sir,

As per the provisions of Goods and Service Tax, Any goods and services which are availed for the personal consumption is not eligible for Input Tax Credit. In your case, Since the loan is taken for Flat, it is not for the Further supply of any goods and services. Hence, ITC cannot be claimed.

Thanks & Regards

Shiv Kumar Agarwal

CA, Delhi

489 Answers

74 Consultations

Talk to Shiv Kumar Agarwal

ITC won't be available to you since it is not for further supply of goods/services.

Hunny Badlani

CA, Madhya Pradesh

2608 Answers

16 Consultations

Talk to Hunny Badlani

No in your case itc will not be available.Input Tax Credit or ITC is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale. Goods and Services Tax (GST) is an integrated tax system where every purchase by a business should be matched with a sale by another business.

Karishma Chhajer

CA, Jodhpur

2452 Answers

29 Consultations