New Delhi, June 16: The government has warned builders of stringent action for asking customers to make entire payment before July 1, the day of GST roll out. It asked them to pass on the benefits of lower tax under the new regime by way of reduced prices or installments.
In a release issued yesterday, the Finance Ministry said that construction of flats, complexes and buildings will have a lower incidence of Goods and Services Tax as compared to a plethora of central and state indirect taxes suffered by them currently.
The Centre warned that if any builder resorts to such practices, the same can be deemed to be profiteering under section 171 of the GST law. The Goods and Services Tax (GST) are on track for scheduled implementation from the 1st of July.
“Advising all builders, construction companies that flats under construction, they should not ask customers to pay higher tax rate on installments to be received after imposition of the GST”.
The GST Council will probably hold its last meeting on June 18 and any change in implementation schedule would have to be approved at the meeting. Notably, Services like religious pilgrimage, healthcare, education, skill development and journalistic activities will remain tax-free under the GST regime. Crude oil, petrol, diesel, aviation turbine fuel (ATF) and natural gas are also being kept out of GST net.
GST, the single tax regime, will benefit consumers and attract private investment also replace multiple state and central taxes to create one national market. This bill seeks to subsume all central indirect levies like excise duty, countervailing duty and service tax and also state taxes such as value added tax, entry tax and luxury tax, to create a single, pan-India market.