Who Will Pay GST Builder or Buyer?

I was aware of the fact that consumers pay Goods and Service Tax (GST) while purchasing goods or services. However, it was my best friend, who is a CA, who explained that the companies that are giving you such goods and services will pay the GST to the government. I know this sounds confusing and you might be wondering now ‘who will pay GST builder or buyer?’. Let me explain this to you.

The ultimate price that the buyer must pay will include GST, which the seller will subsequently transfer to the government. Since this system is used throughout the entire nation, just one tax rate is used. GST was implemented in India with the intention of doing away with the tax on tax (double taxation).

In the prior tax system that was used, taxes were paid on products and profits at every stage of the manufacturing process. This resulted in a bigger tax burden placed on the end-user, who ultimately ended up paying higher prices for the goods or services.

So, the obligation was transferred from the Builder to the Buyer because GST is an example of an indirect tax. Because of this, the builder is required to collect GST from the buyer and pay it to the government. When purchasing under-construction homes in India, such as flats, apartments, and bungalows, buyers must pay a Goods and Services Tax (GST) at a rate of 1% for affordable housing and 5% for non-affordable property. The GST is also applicable to the purchase of developable plots in real estate.

Who will pay GST in real estate buyer or builder?

In India, those purchasing apartments and flats in ongoing construction projects would be required to pay GST on their purchases starting in 2022. Keep in mind that if you purchase a home in an already finished project, GST on a flat acquisition is not payable. A project is considered to be finished legally after it has been granted a completion certificate by an appropriate body.

GST rate on flat purchase 2022

What is affordable housing as per GST?

Housing units priced up to Rs 45 lakhs are considered affordable housing as per the government's definition. To be considered affordable housing, the unit must also meet several requirements. If a dwelling unit in a major city costs up to Rs. 45 lakhs and is 60 square metres or less, it is considered to be an inexpensive home. Such cities include metropolitan cities; Delhi-National Capital Region, Bengaluru, Chennai, Hyderabad, Mumbai-Mumbai Metropolitan Region, Kolkata, and Chennai. A dwelling unit in any Indian city, outside the ones already mentioned, that costs up to Rs 45 lakhs and contains up to 90 square metres of carpeting qualifies as an affordable house.

So, if you are wondering

‘

who will pay GST builder or buyer?’, you have your answer.