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Gst on property

Ashu (NA) (23 Points)

06 June 2017

I bought a apartment from builder under PLP plan, in this i paid 30% to the builder at the time of booking. I have to pay 70% to the builder post 1st July. by then GST will come into picture. Since the apartment is almost ready, will builder be charging me GST or service tax. If builder charges me GST what will be the rate at which builder will charge me GST. Remaing 70% payment i have to pay to the builder once Ocupancy certificate is received.

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6 Replies

Pranoti Shah (CA Job) (61 Points)
Replied 06 June 2017

A property that is under construction is governed by the works contract. The Goods and Services Tax (GST) rate of 12 percent will be applicable on under-construction properties. GST would be applicable on under construction properties at the rate of 12 percent but not on completed, ready-to-move-in apartments. Real estate experts say that stamp duty and property taxes may continue to be levied on immovable properties.

Ashu (NA) (23 Points)
Replied 06 June 2017

thanks for reply,

but builder is saying that since at the time when agreement was executed, the property was under construction. So i have to pay Service Tax/ GST at the time of possession on the payment to be made at the time of possesion. If i had done the complete transaction after the Occupancy certificate is obtained there may not be any Service tax/ GST. Which law/ clause can be shown to the builder regarding GST/Service tax.

Shivam Chomal (498 Points)
Replied 06 June 2017

First of all,there is no doubt in the fact that you will be liable to pay tax, as advance was paid before construction was completed and receiving of completion certificate. Now thing is whether on this remaining 70% amount you will have to pay service tax or GST. So, the provision of the act says "The goods/services supplied after the appointed day in pursuance of a works contract entered into before to the appointed day shall be liable to GST.Here since occupancy certificate is issued after the GST will come into existence so you will be liable to pay 12% GST on this remaining amount of 70%.

Jagdish Baldwa (2 Points)
Replied 07 June 2017

please tell your builder to reduce price to the extent of additional input he will get in GST regime

NITIN (Student) (72 Points)
Replied 07 June 2017

Sir,

What about VAT + Sevice Tax combine together % that home owners has to pay from 1-7-2017?

Ankush Shinde (2 Points)
Replied 17 July 2017

I have purchase gaothan property in koparkhairane in last month, gave 345000 to builder, now waiting for loan sanctioning from finance company, now builder demand for pay 12%GST, should I pay or not, pls suggest, no oc & cc.