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Old 25th June 2017
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Post Query - GST - on outstanding amount - Builder

Builder is asking for 12% GST in outstanding amount (will be funded by bank as loan) after 1 july.Even now 88 percent work done already. Registration of propert has been done in Nov2016. Already paid 4.5% ST and 1%VAT whole amount. So now have to pay (12-4.5-1)% on outstanding amount. Is this leagal to pay?

I have heard builder should pass on ITC(another term for people like me who don't understand it).

How to challenge builder this?
Is there any specific gst component defined?

Please guide in good direction on this as per customer point of view?
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Old 25th June 2017
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Even CA's are learning GST tricks. all are in learning phase. Recently i attended a revamped Tally seminar with GST update etc. All was bouncer. U wait for some time. Dont be in hurry to pay. Consult ur CA. The existing tax liabilities of homebuyers will remain largely unaffected after the introduction of the Goods and Services Tax (GST) regime. The GST Council has brought the real estate sector under the GST ambit partially through works contracts. These will be taxed at 12 per cent under the GST regime. Currently, a homebuyer has to pay several indirect taxes, including excise duty, value-added tax and service tax, which amounts to a tax outgo of about 11 per cent, excluding stamp duty. Under the new regime, all the other indirect taxes will be subsumed and a buyer will have to pay a uniform 12 per cent tax on the purchase of real estate, except stamp duty. This is true for under construction properties but not on completed, ready-to-move-in apartments. On the other hand, entire input credit — excise duty and Central sales tax on construction materials that are paid by developers — will also be allowed unlike earlier. Meanwhile, the government has told developers to pass on any benefits that they may avail under the new tax regime to the homebuyers. “The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/instalments ... It is advised to all builders/construction companies that in the flats under construction, they should not ask customers to pay a higher tax rate on instalments to be received after imposition of GST,” a government statement said. There have been reports of developers asking buyers to make full or large payments before the new regime comes into force on July 1, saying GST would make properties costlier.

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