24 March 2018
An agreement was executed between a buyer and a builder for construction of House Property on 31/10/15 for full consideration of Rs 40,00,000/-(inclusive of taxes). Builder had to complete the construction and handed over the property to the buyer on/before 30.06.2017 (same was mentioned in agreement.) Buyer had made the payments in installments from 31/10/15 to 30/06/2017 of Rs 38,00,000/-. Balance amount of Rs 2,00,000/- paid on 01/09/2017. Now builder is asking from the buyer for GST amount on Rs 2,00,000/-. Can he (builder) claim the GST on Rs 2,00,000/- from buyer when agreement was for Rs 40,00,000/- only (inclusive of taxes)??? Also he has not completed the construction and given the possession to buyer within time as mentioned in agreement. Property is still under construction. Can we take the benefit of sec 171 of CGST Act, where seller has to pass on the benefit of reduction in tax rate and claim of ITC to the buyer, or any other provision of RERA??? Or buyer is liable to pay GST on last installment of Rs 2,00,000/-.
25 March 2018
Builder had to complete the construction and handed over the property to the buyer on/before 30.06.2017 (same was mentioned in agreement.) GST not applicable had the builder completed the construction and handed over as per agreement on/before 30/06/2017. Hence GST is not payable to the builder. Even in worst case 12% GST is payable only on last installment of 2 Lacs only as per the provisions of GST Act
26 March 2018
No builder had not completed the construction up to June 2017 and still construction is going on. My query is that since agreement price was inclusive of tax for Rs 40,00,000/- and Rs 2,00,000/- was paid on sep 2017(after June 2017), so builder is liable for 12% GST to the Govt. But can he recover such 12% from the buyer?? And now he is eligible for ITC so is he not compelled for transfer of such benefit to the buyer by reduction in price. Is there any provision in RERA on which basis he can be in safe side so that he is not required to pay anything extra over Rs 2,00,000/-??
26 March 2018
Yes you are right builder is liable to Govt 12% GST on 2,00,000. But the delay in construction lead to levy of GST which has to be borne by builder.
CAclubindia
