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GST on Under Construction Property - ITC

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GST on Under Construction Property - ITC

Last updated: November 12 2018
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  • GST on Under Construction Property - ITC



    Mr. X (buyer) has purchased a flat in Dehradun from a builder. The Flat is still under construction and possession will be in the month of Feb – March 2019. Due to the implementation of the GST from 1st July 2017, GST rate of 12% is applicable on the under construction property. Please take example below:

    Total Cost of a flat (excluding the Service Tax + VAT) is Rs. 38,00,000/= (Rs. Thirty Lakhs Only). The payment made to the builder by buyer (Mr. X) is as follows:

    A: Till 1 July 2017, before the implementation of the GST, Mr. X (buyer) have paid Rs 20,00,000/= (Twenty Lakhs) to Builder + Applicable Service Tax/VAT.

    B: After 1 July 2017 to Till possession of the Flat which is still under construction , Mr. X (buyer) have paid Rs 18,00,000/= (Eighteen Lakhs) to builder + Applicable GST * 12% (on 18,00,000/= ) paid to builder after 1st July 2017 to till possession.

    There is a provision of Input Tax Credit (ITC) on the GST paid to Builder on under construction property after implementation of GST.

    In this regard please provide information on following points:

    1: Please provide information that what is the GST ITC advantage Mr. X (buyer) can receive from builder? Please provide information in respect of example as above.

    2: Is it compulsory for the builder to pass on the advantage of the GST ITC to Buyer without changing the base price of the flat? Please provide the government order/notification/circular in this respect.

    3: Is there any complaint mechanism, if builder refuse to pay GST ITC to buyer?
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