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Can a builder ask for GST on flat booking if booking was made Pre GST
29-Nov-2023 (In GST Law)
Hi, I have a question regarding investment model adopted in real estate i.e Buyer,Investor & Builder. Full amount of the flat has been paid by the investor against which he has received a letter of allotment in pre GST era (on which service tax has been paid). But now when the builder is selling the flat in GST regime to a customer(investor agrees to it), he wants to transfer the additional amount over and above the investment amount received from the customer to the investor. Please note the construction of flat is complete. Should there be a tripartite agreement, or a cancellation deed and then re-allotment? My ultimate question:What will be the taxation(both direct and indirect) on this additional amount passed by builder to investor?
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/ installments. It is, therefore, advised to all builders /construction companies that in the flats under construction, they should not ask customers to pay higher amount of installments inclusive of all taxes to be received after imposition of GST.
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Adv. Sudha Swamy
Navi Mumbai | 25+ Answers
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