GST By Builder
This query is : Resolved
24 June 2021
Dear Members,
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?
Thanks
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?
Thanks
24 June 2021
You are entitled to get ITC benefit. Take up the issue with anti profiteering authority.
25 June 2021
ITC is not available on building unless you sell them further with gst.
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.
### 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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