Home Buyers to Pay 12% GST on Balance Due if Completion Certificate Issued by March 31

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Home buyers will have to pay 12 per cent GST on balance amount due to the builder if the housing project has been granted completion certificate by March 31, 2019, the CBIC has said.  Builders who have received completion certificate for an ongoing project before April 1, 2019, will have to charge 12 per cent GST from buyers on the balance amount due towards purchase of the flat. Issuing the second set of FAQs for real estate sector, the Central Board of Indirect Taxes and Customs (CBIC) said that builders will not be able to adjust the accumulated credits in ongoing projects in case they opt for lower new GST rate of 5 per cent for normal and 1 per cent for affordable housing. The first set of FAQs for real estate sector was issued last week to clarify doubts with regard to migration of real estate developers to new GST rates for the sector which has come into force from April 1, 2019.

The GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, had in March allowed real estate players to shift to 5 per cent GST rate for residential units and 1 per cent for affordable housing without the benefit of input tax credit (ITC) from April 1, 2019. For the ongoing projects, builders have been given the option to either continue in 12 per cent Goods and Services Tax (GST) slab with ITC (8 per cent for affordable housing), or opt for 5 per cent GST rate (1 per cent for affordable housing) without ITC and communicate to their respective jurisdictional officers the same by May 20. To a query on what shall be the rate of GST applicable on projects in respect of which occupation certificate has been issued prior to April 1, 2019, but the balance demands are pending, the FAQ said: “Time of supply of the service by way of construction of apartments in such projects falls prior to April 1, 2019, and accordingly the rates as existed prior to April 1, 2019, would apply to such balance demands.”

Read More at: https://www.news18.com/news/business/home-buyers-to-pay-12-gst-on-balance-due-if-completion-certificate-issued-by-march-31-2142415.html

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