GST NEWS
Planning to buy new home? First, check GST from builders
Planning to buy new home? First, check GST from builders
Apr 16, 2018

Some builders are even demanding GST for completed projects having occupancy certificate (OC) — a case where it is not applicable.

According to the GST Council, different tax rates are applicable to various materials and services used during construction. It leads to builders paying different GST amount from project to project. As builders are eventually transferring the GST burden on to home buyers, it is essential for the people to know what should be kept in mind while buying a new home.

“Different GST rates are applicable on different construction materials. Cement is charged 28 per cent, works contract 18 per cent and building bricks 5 per cent. As the GST varies from item to item and also from location to location, builders are calculating the whole amount and charging buyers. These variations are adding to the confusion,” says Gummi Ram Reddy, president, CREDAI’s Telangana unit.

“It is difficult to come up with a uniform rate. Therefore, the best way for a buyer is to inquire about each project separately and find out how much GST amount is being incurred so that they don’t end up paying more.”

According to the GST Council, new under construction homes are defined as a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly (the value of land is deemed to be one-third of the total amount charged for such supplies) and the rate is fixed at 12 per cent. But,

realtors are quoting rates ranging from 6 to 12 per cent to the prospective buyers.

“Builders are charging different GST rates depending upon market conditions prevailing in cities and project locations. While some builders are paying GST  thmeselves and absorbing the amount into the final sale price, some are directly transferring the GST burden on home buyers,” asserts Samantak Das, Chief Economist and National Director-Research, Knight Frank India.

“Therefore, buyers should ask a builder whether the price quoted is including or excluding the GST. If it is excluding the GST, then they should ask the builder as to how much input credit will be reimbursed to them after the GST payment. They should demand reimbursement of the input tax credit, which home buyers are entitled to.”

Buyers can take advantage of completed projects which have got Occupancy Certificate (OC), for avoiding the GST.

“There is no GST on completed projects which already have Occupancy Certificate. Therefore, when a builder quotes GST on a completed project, then a home buyer should ask him whether the project has got an Occupancy Certificate or not,” says K Sreedhar Reddy, treasurer, Telangana Real Estate Developers Association (TREDA). “If it has got an OC, then GST should not be paid.”

Source :  The New Indian Express

Top Stories
Revised GST Tax Rates To Go Live On July 27: Several Home Appliances To Be Taxed At 18 Percent
The GST Council entrusted with placing consumer goods and services in multiple tax slabs, removed se...
Jul 25, 2018
149 Views
GST rate cut: Consumer electronics, kitchen appliances, leather items, footwear get cheaper
In its 28th meeting, the GST Council gave its approval to slash tax rates on over 100 items that wer...
Jul 22, 2018
164 Views
Income Tax department seeks GST and GAAR details in new audit form
The Income Tax department has changed a form in the tax audit report, seeking details of the goods a...
Jul 25, 2018
133 Views
GST rate cut to bring renewed interest in beneficiary stocks
The GST council’s monsoon bonanza for consumers in reducing rates on several general use items is li...
Jul 24, 2018
132 Views
No GST refunds for foreigners
Foreigners coming to India may not get the go­ods and services tax (GST) refunds on goods purchased ...
Aug 7, 2018
106 Views
Articles on GST