Hi,
As known till date, GST on contruction service in real estate for redential building, is effective 12% (18% on 2/3rd value) if I am not wrong.
As compared to previous ST and MVAT, that was 5.5%, 12% is much higher rate. It is more than double amount needa to be paid as previous tax. Is it supposed to be worked like this? As it seems to costly now to buy under construction house.
Thanks,
Abhijeet
As such it is different way of calculation........ earlier VAT & ST were charged over under construction properties, plus excise & VAT was charged over raw material like cement, steel etc.... this was not known to customers, but added to the cost of flats by builders.....
Under GST these all taxes are replaced by GST with ITC (input tax credit at each stage).... which means the overall effect would be positive to end consumers.
Only thing is the benefits should come to end consumer by reduction in price of the flat, but that may take some more time.......... may be worked out in new projects....
CAclubindia
