Gst in real estate sector

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This query is : Resolved

Dibyendu Mazumder (Querist)

02 August 2018 Dear all CAs, Tax professions & Expert Accountants , need your urgent reply from u in this regard:
A is a real estate developer, engage B who is a works contractor to execution of all civil works in a specified housing project, all money needs for this work execution transfer from the bank account of A to B & B submit tax invoice to A at the end of month with GST @18%, A is already get Completion Certificate from approved authority for this project , now my question is
1.Is A get refund of the GST deposited byB after considering Input Tax credit, as A have no liability to pay GST for after geting CC?
2.If A not get refund the entire GST deposited by B, is he show the entire amount paid to B , including GST as expreses in his books of accounts?
3.What is the impact is A, the develper, execute the all work himself, I.e.develop & selling both,as he is not liable to pay the GST after getting CC, he is not charge/collect tax from customers, if he is not getting refund the Tax paid to B, is it is not a financial loss to A?So, is it possible that Acarried out all work in his name, directly purchasing materiials & engage worker ,is it batter to him or not?
4. If A segregate all of his work between more than 1 works contracors, ternover of those does not exceeds 20 lacks, Is it batter to A?
Waiting for your expert reply.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

02 August 2018 1 No refund.
2 yes show it as expenses.
3 In such a case also GST payable on material. No financial loss on GST payment include it in building cost and collect it from customer as building cost.
4 Not suggested. Include GST paid in building cost and collect it from customer.

Dibyendu Mazumder

Dibyendu Mazumder (Querist)

02 August 2018 Sir, if developer carried out construction work himself by an unregistered dealer for whose selling right is in his hand, Developer have got C.C. then what happened? as he is not in a position to raise the cost of flat/appartment/ complex?.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

02 August 2018 Yes you can do so as proposed.

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