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Construction complex intended for sale

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Harshit Acharya

296 Points Posted on 28 March 2020

when a construction complex is to be sold , no GST is applicable if consideration is paid after 1st occupation or receiving completion certificate- whichever earlier
Knowing this every person will not be paying consideration till either of the two conditions complete and not be paying gst.
Isn't it a loophole or what is it?

Replies (5)

Quick Summary

This discussion clarifies the Goods and Services Tax (GST) implications when selling a construction complex. It highlights that GST is not applicable if the full payment is received after obtaining the Completion Certificate (CC) or the first occupation, whichever is earlier. While this might seem like a loophole, it's a legally permitted benefit. The change in GST rates from April 1, 2019, means builders now pay 1% or 5% without Input Tax Credit (ITC) in such scenarios, removing the need to reverse ITC previously required.

Kishor Lulla

656 Points Posted on 29 March 2020

Legally allowed. can call loophole or benefit

Pankaj Rawat

GST Practitioner

29904 Points Posted on 29 March 2020

Dear
complete Consideration is received after obtained CC, GST is leviable.

Earlier the Builder/Promotor need to Reverse the ITC in case where he received consideration for particular flat being sold after CC ,but As from 1/4/2019, The Rate has been revised which is 1% ,5% without ITC . So now ITC is not required to reversed in such cases , but ... as you know that huge amount money is involved in construction of Buildings , so if builder do no approach for advance booking from customer , he might be short of funds, means short of working capital . So I don't think that any Promotor will refuse to take Advance because of liability GST.