You can challenge the same before consumer court or rera
GST on EDC plus IDC
I purchased a 2BHK flat in District Gurugram. At the time of purchase in 2018 the Developer/Builder did not mention/discussed that GST will be charged on External Development Charges (EDC) and Infrastructure/Internal Development Charges (IDC). While making the final payment basis the letter for intimation of possession in July 2019, the Developer/Builder mentioned that GST on EDC and IDC may be applicable but the ruling is pending before AAR of Haryana. Now the builder is saying that as per the Haryana AAR ruling document (HSN code and percentage of GST is not mentioned in the ruling document, neither uploaded on the website), we have to pay GST @ 12% (8% for CLSS eligible buyers) on the amount of EDC and IDC charges. Is GST applicable on EDC and IDC charges? Highlighting some Sections/Articles basis shall not be applicable: 1. Section 7(2)(b) of the GST Act, 2016 read with Real Estate Regulations and Development Act, 2016, and 2. Section 7(2)(b) of the GST Act read with Article 243W of the Constitution of India 3. Or any other Sections/Articles
Asked 4 years ago in Taxation
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9 Answers
EDC stands for External development charges. These charges are levied on owners for development of different infrastructure required. External Development or services include the following: Water supply. Sewerage.
2) you would be liable to pay GST on EDCand IDC if there is clause to that effect in your agreement
3) ask builder to furnish you copy of order passed by Haryana AAR
Tell him to provide order of RERA and till than don`t pay him anything. And (EDC) and (IDC are amenities which are attach to flat and provided to promote and attract buyers.
Builder cannot charges for these developments if not included in offer letter and sale deed.
You Please approach RERA at Gurugram Haryana for illegal charges of Builder for EDC and IDC. You may get the illegal charges reversed by the Authority.
Please refer RERA project of Builder online and you may get exact information and full particulars of cost,price,tax,GST charges for flat/plot purchase.
GST is applicable on charges, services and expenses such as preferential location charges, EDC/ IDC, transfer charges and basic sale price etc. Therefore, 18% GST is applicable on EDC/ IDC charges as these are part of services.
Yes you will be liable to GST on EDC and IDC as per your agreement with builder but you can ask builder to provide notification regarding rates of GST which is mentioning for charging the GST.
Dear Sir,
You cited section are fully applicable and you are further suggested to confirm the demand made by the developer from the concerned department through the medium of RTI.
If the builder got the completion certificate before you purchase it, then it is considered as ready-to-move-in property. Hence, in such cases, there is neither supply of goods nor service. Therefore, no GST on such properties.
GST is not required to be paid on the transfer of immovable property if the transfer is made after receiving the completion certificate.
However, the development charge is something different from the immovable property.
However, if these development charges are in relation to any specific alteration or construction provided specifically to you post purchase, GST would be applicable. So, kindly confirm with the builder as to what these charges are meant for.
please check your agreement with the builder to ascertain whether this term of payment of GST or other tax is included or not. That would help you out in a better way
- As per new updates in Haryana , GST will be paid on EMIs for purchase of under-construction apartments and on additional costs collected by the developer (Like- Internal & External Development charges, Preferential location charges and Club membership fees)
- Further, GST will not be charged on Completed Apartments. Currently, EMIs for ready-to-move-in apartments do not attract indirect tax. But instalments paid to the builder for an under-construction property attracts a service tax of 15 percent on which abatement is provided.
- Further, when an advance is received for a flat before OC, the builder is required to pay GST on advance and need to adjust the same.
- Further, a Project is considered complete only, if the Completion Certificate is issued for the entire project and not a part thereof.
- Hence, GST is not required to be pay on the transfer of immovable property , if the transfer is made after receiving the completion certificate.
