GST on sale of flat by owner to third party mid construction, Goods and Services Tax - GST

[Dinesh Mehta]

A buyer purchases flat in an under construction property for ₹ 1.5 crore. He pays 70% of the installments but thereafter decides to sell the same to a new customer. The Builder / developer has paid GST on 70% of the installments after recovering the same from buyer. In this case, the buyer enters into a tripartite agreement with the new customer where the builder is a confirming party. What shall be the GST implication thereafter?

Will the builder / developer continue to pay GST on balance 30% or will he issue credit note to the buyer and recover full GST from new customer?

Also will there be any GST implication to the buyer if he sells the flat to the new customer for ₹ 1.75 crore?

Posts / Replies

[Ganeshan Kalyani]

Sir, the property is under construction , so the supply would attract GST.

[KASTURI SETHI]

I support the views of Sh.Ganeshan Kalyani Ji. GST is applicable on under construction property. Also Go through the decision of AAR Uttarakhand reported as 2020 (35) GSTL.510 (AAR -GST-UK) = 2020 (4) TMI 67 - AUTHORITY FOR ADVANCE RULING, UTTARAKHAND. Applicant : Rajiv Bansal and Sudarshan Mittal.

In addition to above, it is further opined that a perusal of para no.5 of Schedule-III along with para no.(b) of Schedule-II makes it clear that ready-to-move-in or completed property does not attract GST.