WHAT IS GST TAX RATE ON CONSTRUCTION AGREEMENT
This query is : Resolved
Quick Summary
22 December 2020
Dear all
Mr. X is a builder
Flat value 50lakh
Semi finished flat was sold for 35 Lakh
for remaining work 15 Lakh he entered in to construction agreement with buyer on same day
Doubts
Now builder has to pay GST 5% on 35 Lakh and 18% on 15 Lakh
Or
5% on 50 Lakhs
please clarify me
Mr. X is a builder
Flat value 50lakh
Semi finished flat was sold for 35 Lakh
for remaining work 15 Lakh he entered in to construction agreement with buyer on same day
Doubts
Now builder has to pay GST 5% on 35 Lakh and 18% on 15 Lakh
Or
5% on 50 Lakhs
please clarify me
27 December 2020
GST Will only be applicable on 35 Lacs which is the sales value.
27 December 2020
Thank U
Sir
What about 15 Lakh (Remaining Works)
Sir
What about 15 Lakh (Remaining Works)
11 July 2024
In the scenario described, Mr. X is a builder who sold a semi-finished flat for Rs. 35 lakh and entered into a construction agreement for the remaining work of Rs. 15 lakh on the same day. Here’s how GST (Goods and Services Tax) would apply:
1. **Sale of Semi-Finished Flat (Rs. 35 Lakh):**
- The sale of a semi-finished flat is considered a supply of goods under GST.
- GST rate on the sale of under-construction flats (including semi-finished flats) is 5% without input tax credit (ITC).
- Therefore, GST applicable on Rs. 35 lakh would be 5%.
- GST Amount = 5% of Rs. 35,00,000 = Rs. 1,75,000
2. **Construction Agreement for Remaining Work (Rs. 15 Lakh):**
- The construction agreement involves supplying construction services, which attract GST at the rate of 18%.
- Therefore, GST applicable on Rs. 15 lakh would be 18%.
- GST Amount = 18% of Rs. 15,00,000 = Rs. 2,70,000
### Total GST Calculation:
- **GST on Sale of Semi-Finished Flat (Rs. 35 Lakh):** Rs. 1,75,000
- **GST on Construction Agreement (Rs. 15 Lakh):** Rs. 2,70,000
**Total GST Payable = Rs. 1,75,000 + Rs. 2,70,000 = Rs. 4,45,000**
### Clarification:
- The GST is not calculated on the entire value of the flat (Rs. 50 lakh) because:
- The sale of the semi-finished flat is treated as a supply of goods, attracting GST at 5%.
- The construction agreement for the remaining work is treated as a supply of services, attracting GST at 18%.
- Therefore, Mr. X would need to pay:
- 5% GST on the value of Rs. 35 lakh for the sale of the semi-finished flat.
- 18% GST on the value of Rs. 15 lakh for the construction services provided under the agreement.
This approach ensures that GST is applied correctly based on the nature of each supply (goods or services) as per the GST rates applicable under the law.
1. **Sale of Semi-Finished Flat (Rs. 35 Lakh):**
- The sale of a semi-finished flat is considered a supply of goods under GST.
- GST rate on the sale of under-construction flats (including semi-finished flats) is 5% without input tax credit (ITC).
- Therefore, GST applicable on Rs. 35 lakh would be 5%.
- GST Amount = 5% of Rs. 35,00,000 = Rs. 1,75,000
2. **Construction Agreement for Remaining Work (Rs. 15 Lakh):**
- The construction agreement involves supplying construction services, which attract GST at the rate of 18%.
- Therefore, GST applicable on Rs. 15 lakh would be 18%.
- GST Amount = 18% of Rs. 15,00,000 = Rs. 2,70,000
### Total GST Calculation:
- **GST on Sale of Semi-Finished Flat (Rs. 35 Lakh):** Rs. 1,75,000
- **GST on Construction Agreement (Rs. 15 Lakh):** Rs. 2,70,000
**Total GST Payable = Rs. 1,75,000 + Rs. 2,70,000 = Rs. 4,45,000**
### Clarification:
- The GST is not calculated on the entire value of the flat (Rs. 50 lakh) because:
- The sale of the semi-finished flat is treated as a supply of goods, attracting GST at 5%.
- The construction agreement for the remaining work is treated as a supply of services, attracting GST at 18%.
- Therefore, Mr. X would need to pay:
- 5% GST on the value of Rs. 35 lakh for the sale of the semi-finished flat.
- 18% GST on the value of Rs. 15 lakh for the construction services provided under the agreement.
This approach ensures that GST is applied correctly based on the nature of each supply (goods or services) as per the GST rates applicable under the law.
11 July 2024
Thank You Sir
Thank You Verymuch
Thank You Verymuch
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Fixe term employment
- Is any professional CA is here please reply
- Gift Received from nonblood relative
- Experts need help
- Putting a heading on received mail
- Section 50-fixed asset-->building ceases to exist
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Reprocessing of rectification order AY 2025-26
- FTS Taxable under 115A
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
