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GST registration cancellation in case of builder

CA Shweta Rupeja (Chartered Accountant ) (65 Points)

28 April 2020

Our client is a builder and has shown itc as ineligible. Since the turnover is below 20 lacs he wants to cancel his GST registration. There is no stock of inputs nor finished goods. However he has stock of semi-finished goods. What will be the liability on semi-finished houses (affordable house)?

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6 Replies

Rajkumar Patel (602 Points)
Replied 29 April 2020

He has to follow section 29 to furnish details of inward supplies

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CA Shweta Rupeja (Chartered Accountant ) (65 Points)
Replied 29 April 2020

Whether GST is required to be paid on semi-finished houses?

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 30 April 2020

Whether the semi finished houses booked or installments are being received from customers?

CA Shweta Rupeja (Chartered Accountant ) (65 Points)
Replied 30 April 2020

No, houses are under construction and there have been no bookings yet.

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 30 April 2020

Then you can cancel without any problems. As ITC have already been denied under new rates for real estate and you are planning to sell the units after their completion no GST was applicable forget about the turnover itself.

Go with cancellation.

Moreover just for knowledge GST is applicable only on supply. When there is no supply there is no GST. Secondly till units are not booked they are of the nature of immovable property (building) and GST does not cover tax on buildings (Schedule III). It is only when booking is done before completion that it gets classified as service and GST gets levied.

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CA Shweta Rupeja (Chartered Accountant ) (65 Points)
Replied 30 April 2020

Thanks