Flats standing on the verge of being ready due to GST

If you are paying the installer for installments for your flat then you may have to pay 12% GST after July 1. Right now you pay 4.5% service tax, but after GST it will be 12 percent. In the same way if you buy a house in a project after July 1, which has been completed or is close to it, you still have to pay 12 percent GST.

Builders claim that the reason for raising 7.5 percent (4.5 to 12 percent) tax on GST after tax is that they will not be able to claim credit from the tax paid before the GST is implemented. Most of the projects that have been completed or are due, most buyers have given 90 to 95 percent of their share. In such cases, the burden of heavy tax will be on the remaining 5 to 10 percent of the amount. After 1 July, any invoice issued by the builder will take 12 percent tax. Many developers have already sent a notice to give more tax on the remaining amount to the buyers.

Try to understand this whole case with an example. Let’s say that any Bayer has bought a flat of Rs.1 crore, for which so far the tax of Rs.20 lakh has been given with 4.5% tax. Now the remaining Rs 80 lakh, Bayer will have to pay tax at the rate of 12 percent. That is, it would have to give Rs 3.6 lakh at the rate of 4.5% for the 8 million rupees but due to the GST being implemented now it will have to pay 9.6 lakh rupees at the rate of 12%.

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