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 valuation of under-construction homes requires land deduction and transparent invoices showing the taxable construction value and applicable rate.
GST on an under-construction residential property is discussed as requiring a deemed one-third deduction from total consideration towards land, with tax calculated on the remaining construction value. Confusion may arise where a rate applied to the taxable portion is expressed as an effective rate on the full agreement value. Buyers should seek a detailed tax calculation and valid invoice showing the land deduction and taxable value. The discussion favours invoice correction by the builder over a later purchaser refund claim and suggests professional advice or grievance channels where required.