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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
Answer ID : 76216

As Demand is raised, GST need to be paid. However, Believe RERA has a provision to cancel the allotment if amount is not received even after reminders. Incase, builder can use that to cancel the allotment and the Claim (hence negate GST liability). It all depends upon ability of the builder re-sell the property again

Posted by Sai Ram on Jan 22, 2019
Answer ID : 76802

normally, the payment will be linked to the stage of completion. if there are ,say, 5 floors, the completion will not be uniform in all the floors. further, in case of unbooked flats, there will be no GST liability. Also, he need raise a bill only on completing the stage of work. the builders can manage that depending on the receipt from the flat purchasers.

Posted by CA. VENKITARAMAN K V on Jun 08, 2019