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Question ID : 34823


Is GST applicable? Agreement to sell a constructed property on a future date and advance is taken now. There is no agreement for construction of property.

Posted by Sai Ram on Sep 27, 2018

Filed Under GST

Answer ID : 73967

Sale of completed building is not taxable as its excluded from supply by sch III, para 5. Advance taken also enjoys said exclusion from GST. But if building is not completed, please examine if this transaction is 'in the course or furtherance of business'. If it satisfies test of 'business', tax applies on advance and later on rest of value. Absence of agreement for construction seems deliberate but not helpful in overcoming tax liability because agreement to sell property to be brought into existence in future cannot be of unspecified description and specification and at unknown location, for absence of agreement to construct to be accepted. Surely, this is not a Housing Development Board that allots property in future without any details made known at present. Seems question is drafted in cryptic fashion.

Posted by CA. JATIN CHRISTOPHER A on Sep 29, 2018
Answer ID : 76010

For Sale of constructed property not to attract GST, no advance shall be taken by the promoter / developer. If advance is taken GST will be applicable on construction of property and GST will be liable to be paid on the advance taken by the promoter

Posted by Balaji on Nov 19, 2018