Builder charge GST for sale without invoice

[Velayutham Karani]

Hi Team,

I booked one plot from the reputed builder in Chennai. I paid almost 90% of the sale consideration value including GST as mentioned in the builder quote.

When i asked for the GST invoice, builder gave only receipt without invoice and GST number. He say GST bill will not be provided. is this correct?

in the quote, Builder mentioned 'there will not be any rebate of GST input credit to be pased', Being individual, Am I elligible to claim input credit?

thanks, Velayutham

[Sadanand Bulbule]

Dear 

Plz make it clear whether you have purchased plot or flat? Further in respect of purchase of immovable property like plot or flat, the transaction gets terminated automatically. So the question of ITC does not arise to the buyer.

As regards to invoice issued by the builder, there is no GST on the sale of plot. Whereas in respect of flat, the facts need to be checked as regards to payment made to the builder, before or after the completion of the flat.

[VENU K]

GST credit cannot be claimed is true.

But if the builder has collected GST from you he is bound to give you a tax invoice also.

[Sadanand Bulbule]

The builder is also bound to remit the amount of GST so collected to the department on time.

[KASTURI SETHI]

The undermentioned my reply is in consonance with the reply of Sh.Sadanand Bulbule, Sir. Therefore, my reply should be read conjointly with his reply.

(i) Sale of land (plot) is neither supply of goods nor services as per Clause 5 of Schedule-III. Hence it is non-GST supply and GST is not leviable. The words, "sale consideration including GST" confirm that the builder has collected GST from you. which is not leviable. He cannot retain with him.

(ii) As per Section 76 (1) of CGST Act, the builder is statutorily bound to deposit the said amount of tax with the Govt.

(iii) As per Section 54 (1) of CGST Act, any person can claim refund. For claiming refund as an individual, being unregistered, you can apply for refund under Section 54 (1) of CGST Act read with Board's circular appended below

Refund for unregistered person under CGST Rule 89(2) — Implementation of filing an application — Clarification

C.B.I. & C. Circular No. 188/20/2022-GST, dated 27-12-2022

[Sadanand Bulbule]

Dear Sir

Thank you very much for expanding the explanation in the interest of all.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, You have already laid the foundation. 

[Velayutham Karani]

thanks everyone for the comment and advices. 

Some additional info. this is only plot under construction. there is no flat or building. builder made two agreements one for "sale of plot" and other "construction of ammenities"... he put GST in both. when i asked him to show price is exclusive of GST in the agreement, he did not mention. he did not provide GST bill as well. 

I paid 90% of the total amount include GST for both agreement. but builder did not give GST bills. 

[Sadanand Bulbule]

In view of your last post, the simple remedy is to visit the nearest GST office and provide all the relevant documents with payment details in writing. Certainly they would cause proper action as per law.

[KASTURI SETHI]

The querist is again solely  dependent upon the builder. In case the builder deposits  amount of tax  with Govt., the querist will have to obtain disclaimer certificate'' from the builder. The builder will declare that he has no objection if refund is sanctioned to the buyer. He will also undertake that he will not claim refund from the department.

 The department does   not interfere with the internal dispute between the buyer and the builder. At present the best  way-out is to get refund of tax from the builder by way of persuasive method. This is a short-cut method.. Otherwise be prepared to face the rigours of litigation and the litigation is time consuming and full of stress.

[Sadanand Bulbule]

Dear Sir,

When I was working in Enforcement wing, a similar buyer approached me with relevant details. Based on that, we conducted investigation against the builder, which busted huge tax evasion. In that backdrop, I suggested the querist to do the same. 

Otherwise also, the querist is at liberty to follow your advice to seek refund of GST. 

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, I agree with your views in toto. The basis of your reply is full of substance. It is natural that if the querist visits the Govt. department with documentary evidence, such action can be feared. Some persons may not like to go to that extent. The querist is concerned with his refund of tax paid which was not leviable. Sale of land/plot remained tax-free even in Service Tax era. When an agreement is signed by both parties, it should be read thoroughly and carefully before signing.

Two years ago I dealt with similar issue. Both the parties are in RERA Court. because of the complicated language of the agreement. Here we are not aware of the terms and conditions of the agreement executed between both.

Litigation should be the last resort.

[Sadanand Bulbule]

Dear Sir ji

Very true. We are offering comments on limited information. Our perspective is always larger than the query.

[KASTURI SETHI]

Dear Sir,

Yes, Sir. The reason behind 'larger perspective' is that experts' advice/guidance consists of characteristics of sincerity, honesty and genuineness.

AI Summary

Buyer Challenges Builder Over GST Charges on Land Purchase; GST Not Applicable on Land Sales Under CGST Act A buyer in Chennai raised a concern about a builder charging GST on a plot purchase without providing a GST invoice. The builder stated that GST bills would not be provided and mentioned no GST input credit rebate. Responses clarified that GST is not applicable on land sales, and the builder must remit any collected GST to the government. Refunds can be claimed under the CGST Act if GST was wrongly collected. It was advised to approach the GST office with documentation for resolution. The discussion highlighted the importance of understanding agreements and the potential need for legal action if issues persist.