Gst for under-construction flat purchased in march 2017

Hello All,

I have purchased a flat in RERA registered project in March 2017, possession promised as on December 2017.

1. As a booking amount I have paid 1 Lakh on March 28, 2017.

2. Agreement of sale for the flat is completed on March 31, 2017.

3. I have processed my home loan from Axis Bank and considering the building construction status around 21 Lakhs payment made by Axis Bank on June 30, 2017 to Builder.

4. Now for the rest of payment i.e., 15 Lakhs builder is asking for GST taxes as extra, which is 7.5% extra taxes compared to earlier taxes (12 % GST - 4.5 % Service Tax as vAT paid already can not be considered for the flats registered before June 30, 2017).

5. When I asked about Input Tax Credit that is to be paid back to customers, they simply said that they have purchased all the material before June 30, 2017 so nothing will be paid back to customers.

6.If Builder is genuine, then it means they paid all the taxes to Government correctly while purchasing raw material and Customer is also paying again - which is totally a loss for Customer. Finally I have come across many articles, that under section 171 - builders can not force customer for extra taxes or GST.

Can someone please suggest how to handle this situation because 1.35 Lakhs extra taxes is a huge amount for me.

Thanking you very much for your help.


As per law only GST is payable on under construction property. After application of GST service tax stand abolished so you are not liable to pay service tax @4.5% as demanded by builder. It is to be seen as to when the state where you reside has adopted GST. If you had already paid total cost prior to implementation of GST then if the builder pays GST on raw material then it should be proportionate and not to be calculted aginst the consideration of the flat. Consult a tax expert in this regard.




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