Goods and Services Tax – F. No. 296/07/2017-CX.9 – Dated:- 15-6-2017 – Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Dated 15/06/2017 The C.B.E. & C. and States have received several complaints that in view of the works contract service tax rate under GST at 12% in respect of under construction flats, complex etc., the people who have booked flats and made part payment are being asked to make entire payment before 1st July, 2017 or to face higher tax incidence for payment made after 1st July, 2017. This is against the GST law. The issue is clarified as below :- 1. Construction of flats, complex, buildings will have a lower incidence of GST as compared to a plethora of C
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rrently borne by the builders, which they pass on to the customers as part of the price charged from them. This is not visible to the customer as it forms a part of the cost of the flat. 4. The current headline rate of service tax on construction of flats, residences, offices etc. is 4.5%. Over and above this, VAT @ 1% under composition scheme is also charged. The buyer only looks at the headline rate of 5.5%. In other cities/states, where VAT is levied under the composition scheme @ 2% or above, the headline rate visible to the customer is above 6.5%. What the customer does not see is the embedded taxes on account of cascading and sticking of input taxes in the cost of the flat, etc. 5. This will change under GST. Under GST, full input cre
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