Services linked to flat construction to attract lower GST
ECONOMY & POLICY

Services linked to flat construction to attract lower GST

Buyers of properties that are still under construction will be pleased by a recent Appellate Authority for Advance Rulings (AAAR) judgement in the case of a Thane-based developer because it might result in lower costs.

The appellate bench determined that the developer's fees for several services, including Puranik Builders claims that certain costs are "inextricably related" to their principal service of construction, such as those for water connection, electric metre installation and metre deposit, development fees and legal expenses.

These fees will be included in a "composite" or bundled supply and be liable to GST at the lower rate of 12% that is applicable to construction services.

The Authority of Advance Ruling determined that all other fees charged by the builder were independent and hence liable to GST at 18% in its judgement from August 2021. As a result, the developer appealed to the AAAR.

Buyers of properties that are still under construction will be pleased by a recent Appellate Authority for Advance Rulings (AAAR) judgement in the case of a Thane-based developer because it might result in lower costs. The appellate bench determined that the developer's fees for several services, including Puranik Builders claims that certain costs are inextricably related to their principal service of construction, such as those for water connection, electric metre installation and metre deposit, development fees and legal expenses. These fees will be included in a composite or bundled supply and be liable to GST at the lower rate of 12% that is applicable to construction services. The Authority of Advance Ruling determined that all other fees charged by the builder were independent and hence liable to GST at 18% in its judgement from August 2021. As a result, the developer appealed to the AAAR.

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