GST details in under construction property sale agreement.
9 months ago
My builder for under construction flat has not mentioned GST amount/details in the sale agreement.
The builder is collecting GST at 5 percent rate from me on the property base price .
But has only mentioned the sale price of the property in the sale agreement as the final price.
For example the sale price is 1 cr for the under construction property and the seller is charging 5% GST from me on top of it. So i am paying 5 lakhs as GST.
Seller has mentioned “Total Sale Consideration” as 1cr in the agreement and later written the below statement as:
“The Total Price above includes Taxes (consisting of tax paid or payable by the Promoter/developer/vendor by way of, GST, Value Added Tax, Service Tax,and Cess or any other similar taxes which may be levied, in connection with the construction of the Project payable by the Promoter/developer/vendor,”
I believe this is not correct and the sale agreement should clearly mention that the sale price in agreement is excluding GST. Please suggest.
Is the builder trying to save GST on his part. If i sign the agreement will it impact me later if i resell the property .
When purchasing an under-construction property, it's essential to have a clear understanding of the total cost, including any applicable taxes such as GST. The sale agreement should transparently state the base price, applicable taxes (like GST), and the total amount payable by the buyer. This is necessary to avoid any confusion or disputes later on.
If the builder is charging GST at a rate of 5% on top of the sale price but has not mentioned it separately in the agreement, it could potentially lead to issues in the future. It may create ambiguity and can be a concern when it comes to taxation and documentation.
Here are some steps you can consider:
Seek Clarification: Before signing the agreement, seek clarification from the builder about the GST details and why it is not mentioned separately in the agreement. Request for a clear breakdown of the total amount, including the base price and GST.
Get a Written Agreement: Ensure that any discussions, clarifications, or modifications made by the builder regarding the GST are documented in writing and included as part of the agreement.
Consult with Legal Advisor: If you have concerns about the agreement's language or its implications on your future resale, consult with a legal advisor who is well-versed in real estate and tax laws. They can review the agreement and provide you with the necessary guidance.
GST Invoice and Receipts: Make sure you receive proper GST invoices and receipts from the builder for the amount you pay as GST. This documentation is essential for tax purposes and future resale transactions.
Verify the Builder's Credibility: Check the builder's reputation, track record, and whether they are complying with all relevant laws and regulations.
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