How GST real estate profiteering works
estate sector and I would appreciate any addl inputs from NAA
Under the Goods and Services Tax (GST) regime, a 12% tax rate is charged on the sale of under-construction flats while full ITC can be availed by a builder for offsetting the headline rate of 12%.
The builder has to pass on the benefit available on account of the ITC by reducing the base price of the flat for the buyer.
As the ITC is availed by the builder on the materials utilised for construction, the overall tax liability should come down by 4-8% for the under construction properties. It, however, varies from state to state. In cities like Delhi and Mumbai, where the land prices are high, the builder should pass on an average 4-6% tax benefit to the consumer. In the states where the land cost is less, builders should pass on more benefit to consumers.
As per the anti-profiteering provisions under section 171 of the Central GST (CGST) Act, any reduction in the rate of tax on supply of goods or services or the benefit of ITC shall be passed on to the recipients by way of commensurate reduction in price. more
On Sunday, 16 December, 2018, 10:46:09 AM IST, Harsimran Kaur <email@example.com> wrote: more