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Is gst applicable on cancellation of a flat

12 December 2018

Hello Everyone,

I would need your input on below matter.

I am from Hyderabad and I had booked a flat.I have a given 200000(2 lakh) cheque as token advance to builder.Due to some reason I had canceled my booking.and asked for refund.Builder has refunded me 178571 rs and he said he has paid 21429 rs as GST to government.I got some doubt on this GST part and I found that GST is not applicable for flats if Sale Agreement is not made.So when I asked builder to give me some proof/evidence that for GST which he paid behalf of me. But builder is saying he will not give me evidence.

Any one could you help me here, Does GST applicable on cancellation of Flat. Do I have rights to ask evidence/proof for tax which he paid to Govt?

Thanks,
Krishna Y

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11 Replies

Avirup Ghosh (26 Points)
Replied 12 December 2018

The deducted amount(21429) of the total amount (2 lakh) must to have a document proof / evidence to payment of gst which paid by the builder behalf of you . In that situation the builder is not give you any proof / evidence you should contact the consumer forums . But you must to have the agreement plan as well as when you paid for advance of the amount ,. it's receipt copy . I think this information will help you. thank-you.

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Krishna yalla (7 Points)
Replied 12 December 2018

Thank you Avirup,

I have original reciept copy given by builder for 2 lakhs.I didnt sign on any agreement document as I gave 2lakhs as token advance and I havent paid full downpayment and when I ask for sale agreement he said Sale agreement wil be made only if I pay 20% downpayment.

Do you know process to file complaint with consumer forum?

Thanks,

Krishna Y.

Avirup Ghosh (26 Points)
Replied 12 December 2018

from which state you belong?

Krishna yalla (7 Points)
Replied 12 December 2018

Telangana

Upendra Neduri (164 Points)
Replied 13 December 2018

well, GST is applicable on advance received from customers for flats booking. considering the issue, the builder would have followed the same rule and paid GST to govt by filing 3B return.

Another thing is that however the advance is returned , the GST amount paid would be returned to builder in some way (reversing the sale advance).

I think he may be benefited by way of Input tax credit, you may ask for full amount as advance reverted back.

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Prajwal Shetty (Artical Assistent) (237 Points)
Replied 13 December 2018

Respected
1. Gst in case of purchase of flat is applicable only when occupancy certificate is not issued by local authority.
2. Since in our case you had cancelled the sale transaction the builder should have issued you a credit note along with refund of full Rs 2 lakh, because the ultimate burden of Gst charged by him is on you and you had not taken the credit of Gst paid at the time of Advance of Rs 21429.

Krishna yalla (7 Points)
Replied 13 December 2018

Thank you all for reply.. I am still trying my best to get. But builder is not responding in good manner.

Sharaj (CA) (24 Points)
Replied 22 February 2019

As per section 31(3)(e) of the CGST act the builder shall issue a refund voucher at the time of cancellation of booking and may claim refund of the GST paid on advance received as per section 54(8) of the CGST Act.

Thus you may claim the entire proceeds from the builder on account of the above, irrespective of the sale agrreemnent being made.

T Santosh (Accountant) (25 Points)
Replied 22 March 2019

Dear Sharaj,

If the advance paid to builder in 2017-18 and cancellation is done in December 2018. The GST paid by builder cannot be reversed (or avail the credit) after September 2018. what will be the case in this scenario? Please suggest.

T Santosh (Accountant) (25 Points)
Replied 22 March 2019

Hi Sharaj,

What if the booking is taken place in FY 2017-18 and GST on the booking amount is remitted to the Govt. by the builder on the same year. Now the cancellation taken place in the December 2018, can a builder avail the GST reversal credit? Please suggest.

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Jalaram Developers Jalaram dev (2 Points)
Replied 28 June 2019

Yes, I am K.A.Ramam. Accountant from Gujrat (dealing Construction line) . You have paid Cheque for Rs.200000/-. Builder has to provide GST paid challan on which Month he has filled returns ( showing as GSTR-1 ) showing as booking advance date/month is required....... He should give it you.. Otherwise you have written complient in GST COMMISSIONER,... WITH PROOF OF YOUR PAYMENT RECEIPT TO BUILDER ( ARE ARE HAVING ANY AGREEMENT FOR SALE) OR GET GST NUMBER FROM BUILDER..... THE YOU HAVE LODGED A COMPLIENT IN GST OFFICE NEAREST RANGE-