Respected sir please inform me whether builder and developer who has opted to continue old scheme of gst tax and project is still incomplete whether he has to pay reverse charge on unregistered labour Contractor, urd purchases and urd expense

Reply-In case of on-going project, the promoter has an option to pay GST at the old rates, i.e. at the effective rate of 8% on affordable residential apartments and effective rate of 12% on other than affordable residential apartments and, consequently, to avail permissible credit of inputs taxes; in such cases the promoter is also expected to pass the benefit of the credit availed by him to the buyers.

A project which meets the following conditions shall be considered as an Ongoing project and builder can charge old GST rates (8% or 12%) with ITC and needs to intimate manually in Form Annexure IV to the Jurisdictional Commissioner by the 20th of May, 2019 —

(a) Commencement certificate for the project, where required, has been issued by the competent authority on or before 31st March, 2019.

(b) Completion certificate has not been issued or the first occupation of the project has not taken place on or before the 31st March 2019.

(c) Apartments of the project have been, partly or wholly, booked on or before 31st March 2019.

Condition of  80% of inputs and input services (other than capital goods, TDR/ JDA, FSI, long term lease (premiums)) shall be purchased from registered persons is applicable on new rate of tax i.e. 1% or 5% as the case may be. This condition is not applicable on old rate structure.