Gst on under construction property

Others 204 views 3 replies

I recently paid 23L (after the GST rate came down to 5% from 12%).

I received a demand letter for GST payment for 7% (this was mutually agreed rate at the time of agreement) instead of 5% which is the rate at the time of demand and payment (invoice generation)

They said they will charge 7% for the work completed before rate change, and any new work after this will be charged 5%.

Is this a true logic? I believe the GST rate is an application on the date of demand, payment and not related to work completed before the rate change. 

Please, advise.

Replies (3)

Yes, if work was completed before the rate change, old rate applies.

But in this case some would end up paying more GST. As in my case, GST came into application just after I booked a flat, and now I have ended up paying around 5 lakh of GST, 12% which could have been around 2 lakhs if older service tax was in application that is 5%. If this is as expected scenario how come GST supposed to beneficial?

Yes, that is why Government had asked builders to pass on benefit of ITC to customers, as the same is applicable under GST act, but not previously.


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