News

HC order to pare GST outgo for buyers of under-construction flats: Experts

HC order to pare GST outgo for buyers of under-construction flats: Experts

The Gujarat High Court ruling that actual value of land should be deducted before levying GST on under-construction flats would reduce the tax outgo for homebuyers, provided the contractual arrangement transparently denotes the land value, experts said.

Currently, GST is levied on sale of under-construction flats/units wherein the entire value of flat or unit (including value of underlying land) is taxed after giving Ad Hoc deduction of 1/3 of value of flat/unit towards land irrespective of actual value of land.


Experts said in urban area or metro cities actual value of land is much higher than 1/3 value of flat and application of 1/3rd deduction is arbitrary in nature as it is applied uniformly irrespective of the area, size and location of land.

Top