The government has warned the real estate developers for asking full payments in advance from buyers before the implementation of the GST.
In a statement, M Venkaiah Naidu, Minister of Urban Development said that taxes such as VAT, central excise duty, entry tax, works contract service tax etc., which is almost 18% will come under the headline rate of 12% GST. He also told that the developers must pass the tax benefits to the consumers since the GST will bring down the overall tax for realty projects. Additionally, he asked all the state government and builders’ association to ensure that no developers ask buyers to pay a higher tax on the name of GST.
Recently, the finance department has announced that the government will soon set up a committee to look into complaints against developers/companies for making undue gains (profiteering) after imposition of the GST. The government will take strict action against developers for ‘profiteering’ under the section 17, the anti-profiteering clause of the GST rules.
Nishant's issue is a common burning issue for all home buyers who are caught in between transitioning phase of GST. Most of them do not have a choice to exit as a large part of the payment is already done. No transparency exists or promised under GST (other than hollow threat of anti-profiteering which is valid only for 2 years and unlikely to be used due to litigation inconvenience) to customer how much developer pocket the input credit fuzzing the accounts and not passing the benefit to customers. Most builders are denying *any* benefit to existing customers or even to new customers where projects where most of the flats are sold out (in the pretext of being "fair" to existing customers, they offer same rate, but end outgo for customers are more by 7.5%)
5Dear Sir, e Ahmedabad (Gujarat). Purchased my first residential property in Ahmedbad before 2 years and that is under construction. Came to know from my developer that i would need to clear the remaining payment to be disbursed by my lender (HDFC LTD) which is approximately 10.8 lacs before 1st July or i will have to pay an additional sum of Rs 3 lacs approximately as the tax will be revised from 4.5 to 12% post GST. I am in no position to pay that money and i am also paying my monthly rentals at the home where i stay at this time. Request if someone can help buyers like us. The goverment has stated that the developers have to pass on the benifit. What if they don't pass the benifit? I hope i get a response on it. Regards, Nishant Marar 9904020104
No one can stop builders to stop unwanted payment withdrawal from buyers example Mr mittals infratech ghaziabad