Gst paid to a builder forms cost of acquisition?

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This discussion explores whether Goods and Services Tax (GST) paid to a builder should be included in the cost of acquisition for a property. Initially, one view suggested GST is a tax payable to the government and doesn't enhance property value. However, this was later revised, with the consensus leaning towards including GST as part of the acquisition cost, provided it hasn't been claimed or benefited from under another income head.

Rakshitha

Rakshitha (Querist)
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27 July 2020 Dear sir

Suppose I bought a flat in Jan 2019
Flat cost 80 lakhs
Stamp and registration charges 5 lakhs
Gst paid 1.2 lakhs.
And I sell the same property on 1st Jan 2020.
What is my cost of acquisition?
Whether gst paid sould be included or not?

VIJAY KUMAR

VIJAY KUMAR (Expert)
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27 July 2020 No, GST is in nature of tax payable to the GOVT and its utility ends up then and there. It does not enhance value of the property, whereas Stamp duty and Registration charges gives legal character and make property salable in future.

Rakshitha

Rakshitha (Querist)
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27 July 2020 Dear sir,

Thanks for the reply.
I just wanted to know is there any article or notification with you for the same treatment.
If you could share as such it would be of a greatest help.

VIJAY KUMAR

VIJAY KUMAR (Expert)
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27 July 2020 Dear Rakashita,
I am sorry, my view was wrong, as I could not find any article or notification to substantiate my above mentioned opinion. Rathar in my view GST expenses are very well part of the cost of acquisition if ARE not claimed/benefit taken under any other head of income. Regret for inconvenience.

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