CAN BUILDER/DEVELOPER SHIFT TO 5% FROM 12%

[NAMAN DOKANIA]

A builder has opted for 12% by filing annexure 4. He now wants to shift to 5%, and come under the new scheme. How can he opt for the same??

[Shilpi Jain]

That is not possible. Any reason why the builder wants to do so?

Also you could check if the project was a new project at 1.4.19 so that it would be automatically liable to 5% only

[ABHISHEK TRIPATHI]

Dear Naman Ji,

Builder has adopted the old GST rate by filing the Annexure IV. It is not allowed to be changed (Refer the declaration in Annx. IV).

In any case, if you establish that you are governed by the old rate of 5%, then you will be opening the pandora box of litigation. Resultantly, expect SCN for availing 12%.

So, maybe not.

AI Summary

GST rate election cannot be switched after filing Annexure IV, except where a project is newly commencing at transition. A builder who filed an Annexure IV opting for the higher GST rate cannot subsequently change that election to the reduced rate because the Annexure IV declaration is final; only projects that qualify as newly commenced at the transition point may be governed by the reduced rate, and attempting to reclassify an existing election risks a show-cause notice and litigation exposure.