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Question ID : 36921


Dear Sir, As per my understanding if agreement executed between customer and builder. Whenever builder will complete construction up to certain stage (as mentioned in construction linked payment plan ) he have to raise demand/bill and pay GST on the basis of such billing/demand. In current scenario where real estate sector facing very serious slow down only 30 to 40% demand recovered on time and balance 60% to 70% remain outstanding and builder have to pay GST of such unpaid demand. I want to explain it in example:- Total flat 100 no. Amount of Demand Rs. 2,00,000/- each Amount of GST @ 12% Rs. 24000/- each now suppose 30% demand recovered Amount received Rs. 240000*30 = 6720000/- Amount to be paid for gst 24000*100 = 2400000/- Net Pay Out 43,20,000/- We can seen here that gst recovered only against 30 flat but pay to govt for full 100 flats. My Query is :- 1) Is my understanding (As mentioned above )is correct ? 2) Is there any way out to not gst only on receipt basis ? Please guide Thanks & Regards, CA Vikas Gupta 09983299484

Posted by vikas Gupta on Jan 03, 2019

Filed Under GST

Answer ID : 76190

Business slow down would not impact. However the representation by industry on its practice may allow govt to relax. However as law stands once milestone reached- GST wouldbe liable. It is like when good sold IT is paid on the profit of the same though it may become a bad debt tomorrow.

Posted by Madhukar N Hiregange on Jan 11, 2019