PROPERTY PRICE RISE AND GST AFTER 1-7-2017
Earlier-There was VAT and alternatively Composite Tax and Service Tax on the construction industry
NOW BOTH ROLLED INTO ONE-CALLED GST
Under GST the Service tax is 12%.
It has been learnt that customers willing to buy a nearly-completed house/flat will have to pay 12 per cent service tax on the entire amount, which is almost 7 percent higher than the previous rate of 4.5 percent. In addition, if customers are paying for their house in instalments, they too, will have to pay to 12 per cent service tax from July 1 onwards.
There is almost a 7.5 percent increase in such taxation after the GST regime comes into effect, as they will not be able to claim any credit for the taxes paid on inputs bought before July 1.
The invoice issued by the builder after July 1 will surely attract a GST rate of 12 per cent, forcing developers to write letters to clients briefing them about the situation. It is also true that many builders have not issued VAT Bills to the home buyers and many have not issued Invoices for the buildings or apartments sold.
Many home buyers are not aware of taxation issues like, earlier VAT and Service Tax and Now both combined is GST, rolled into one.
More clarification is required to remove the confusion among the builders as well as the home buyers and if required few sections might be Amended.