According to the Central Board of Excise and Customs, builders should pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/instalments.
State-run NBCC is likely to give some relaxation to homebuyers of NBCC Green View Apartment, Gurugram, after buyers complained that the construction major has included additional charges including that of goods and services tax. “We are thinking that we would provide some relaxation to the homebuyers…We will ask homebuyers to take the possession of the flats and whatever payment is left, we will deal with it later. We are thinking of doing something on these lines,” Anoop Kumar Mittal, chairman and managing director of the navratna company, told FE. The decision to relax the payment schedule comes in after the homebuyers alleged that instead of passing on the benefits of lower tax burden under GST, NBCC has issued demand letters to the allottees of NBCC Green View project for payment of last instalment, increasing the instalment by more than Rs 40,000 from the originally agreed instalment, in the name of GST. “This is a clear case of profiteering by a reputed company,” a letter from RK Gupta, on behalf of the homebuyers, to the Prime Minister’s Office said.
According to the Central Board of Excise and Customs, builders should pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/instalments. The builders have, therefore, been advised by the CBEC that in the flats under construction, they should not ask customers to pay a higher tax rate on instalments to be received after the imposition of GST, and any violation of that will be deemed to be profiteering under section 171 of the GST law. Homebuyers have also complained that the quality of construction is also extremely poor. Moreover, the project has been delayed by almost two and half years from the date of its scheduled completion which was May 15, 2015. “NBCC has not bothered to pay any compensation to the allottees for the delay and instead the allottees are being penalised by charging higher instalment to the extent of more than `40,000 per head in the name of GST. Had the project been completed in time, the allottees would have been saved from higher cost,” the letter said.
Buyers alleged that the demand letter of NBCC is coercive in nature with a levy of interest at 15% for late payment. While on the one hand NBCC is threatening the allottees with a levy of 15% interest on late payment, no compensation is being paid to the allottees for delay in handing over the project. Mittal, however, said, “The last instalment that we only can demand includes any tax liability.”
