GST on Under-Construction Property - Builder Charging on Full Amount

[Rohit Koth]

Im seeking some advice and clarification rgarding GST on an under-construction flat purchase.

I recently booked a flat, and my builder is asking for GST to be paid on the full agreement value. However, based on my research, I believe the GST should only be applicable on two-thirds of the total amount.

My understanding is that GST is not applicable on the land value. For under-construction properties, the law considers one-third of the total flat price as the land value, and thus GST should be levied only on the remaining two-thirds.

Ive already discussed this with my builder, but they insist on charging GST on the entire amount. Ive also checked with a couple of other builders, and theyve given me the same information.

My Questions:

 * Is my understanding of the GST law correct? Is it true that GST for an under-construction property is legally applicable on only two-thirds of the agreement value?

 * How can I effectively convince my builder? What official documents or legal provisions can I refer to to make them comply with the law?

 * If I am forced to pay GST on the full amount, can I claim a refund for the extra amount from the government later? If so, what is the process?

Id be grateful for any insights, advice, or references to the relevant GST laws.

Thank you in advance!

AI Summary

GST on under-construction flats: insist on invoice splitting land and construction; pay under protest and seek refund/adjudication For under-construction flats the GST law taxes the supply of construction services, not pure land; where the agreement does not separately identify land and construction, tax authorities commonly apply a presumptive split treating one-third of the total price as non-taxable land and two-thirds as taxable construction. Ask the builder for a tax invoice breaking down land and construction values; if they charge GST on the full amount you can pay under protest, seek an administrative refund via the GST portal with the sale agreement and invoice, and pursue adjudication or a complaint to the jurisdictional GST officer or consumer forum if refund is denied. Retain all written communications and documents.