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Query on Works Contract service

sathya kumar s (Accountant) (199 Points)

13 November 2021

One of our client is involved in buying of plots, constructing home on it and selling it once it is ready (Some time it is sold under constrution ).

Is he need to charge GST on Invoice if he sells it after completion ?

What about availing ITC if sold if sold under construction/post completion.?

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CA Aakarsh Jain (CA) (10431 Points)
Replied 13 November 2021

As per GST law, construction of a complex, building, civil structure intended for sale to a buyer is considered a service and liable for GST – if any consideration is received before issuance of completion certificate. However, GST is not applicable if the whole of the consideration for a property is paid after issuance of completion certificate by a competent authority or after its first occupancy, whichever is earlier.

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CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 13 November 2021

If sold before completion or any money received before completion then GST payable on the whole amount. If the first money received is after completion or its is sold after completion then there is no GST.

ITC is not available.

sathya kumar s (Accountant) (199 Points)
Replied 13 November 2021

If sold before completion then He need to collect GST. In that case is he entitled to claim full ITC on construction materials purchased....like cement,steel etc.