I have bought a commercial shop in 2019 with a builder project in Gurgaon. The builder was charging 12% GST on every installments. I came to know that Customer shall be entitled to get ITC benefit and lot of judgments have been passed by NAA for anti-profiteering. Now when I encountered the same to builder, they are saying that I'm not entitled to get any benefit as they are paying 12% to Govt. This is the same builder against whom Order was Passed in Dec,2020 for anti-profiteering for a different project in Gurgaon.
Pls guide how should I proceed further? what documents I should ask them?
26 July 2024
In the context of buying a commercial shop from a builder and dealing with GST-related issues, especially regarding Input Tax Credit (ITC) and anti-profiteering, here’s a detailed guide on how to proceed:
### Understanding the Situation
1. **GST on Commercial Properties**: - **Rate of GST**: As of the relevant period, the GST rate on construction of commercial properties is typically 12%. - **ITC Eligibility**: Buyers of commercial properties are eligible to claim ITC on the GST paid if the property is used for business purposes.
2. **Anti-Profiteering and ITC**: - **Anti-Profiteering**: The National Anti-Profiteering Authority (NAA) has mandated that builders must pass on the benefits of reduced tax rates or ITC to the buyers, rather than profiting from it. - **Judgments and Orders**: If an order has been passed against the same builder in another project for anti-profiteering, it indicates that the builder may not have complied with passing on the benefits of ITC.
### Steps to Take
1. **Review Documentation and Agreements**: - **Purchase Agreement**: Review the purchase agreement and any related documents for clauses related to GST and ITC. - **Invoices**: Check all invoices from the builder to verify the GST charged and whether it aligns with the applicable rates and ITC provisions.
2. **Communicate with the Builder**: - **Request for ITC Details**: Ask the builder for a detailed breakdown of GST charged and whether they have claimed ITC on the construction services. - **Proof of Compliance**: Request documents that demonstrate compliance with anti-profiteering regulations and proof that the benefits of ITC have been passed on to buyers.
3. **Documents to Request from the Builder**: - **GST Invoices**: Copies of GST invoices showing the GST charged on each installment. - **ITC Declaration**: Documentation or declaration showing whether the builder has claimed ITC on the GST paid on inputs and services. - **Compliance Documents**: Any correspondence or compliance reports related to anti-profiteering orders, especially if the same builder was previously found non-compliant.
4. **Consult a Tax Professional**: - **Professional Advice**: Consult with a tax advisor or legal professional who specializes in GST and real estate. They can provide guidance on how to claim ITC and address issues related to anti-profiteering. - **Legal Recourse**: If the builder is not cooperating, a tax professional can help you understand your legal options and guide you on filing complaints with the appropriate authorities.
5. **File a Complaint or Appeal**: - **Anti-Profiteering Complaint**: If you believe the builder has not complied with anti-profiteering regulations, you can file a complaint with the NAA or the GST authorities. - **ITC Claim**: You can also approach the GST authorities to understand your rights regarding ITC claims and get assistance in resolving the issue.
### Summary
1. **Verify GST and ITC**: Review your purchase documents and GST invoices. Ensure you are aware of the GST rates applicable and your eligibility for ITC. 2. **Request Documentation**: Ask the builder for detailed documents showing GST charges and ITC claims. 3. **Seek Professional Help**: Consult a tax advisor for guidance on claiming ITC and addressing anti-profiteering issues. 4. **File Complaints**: If needed, file a complaint with the GST authorities or NAA regarding non-compliance with anti-profiteering rules.
Taking these steps will help you ensure that your rights under GST are protected and that you receive any benefits you are entitled to.
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