Question

(i) Peter visited a site of a builder to purchase a flat for his residential purpose. At the site, he examined ready-to-move (completed flats) as well as under-construction flats.

All the flats were not of the same size.

1. 2 BHK under-construction flats were to cost ₹ 45 lakhs or less (GST payable 1%). 
2. The bigger under-construction flats, (3 BHK or more) were to cost more than ₹ 45 lakhs (GST payable 3%). 
3. The completed, ready-to-move-in flats were available for purchase with GST exempted (GST = 0%).

Using the above information, find GST on: 

1. an under-construction flat with cost
   1. ₹ 40,20,000 
   2. ₹ 79,32,000
2. a completed (ready-to-move-in) flat with cost ₹ 89,00,000.

(ii) Peter decided to purchase an under- construction flat costing ₹ 96,84,000. After bargaining, the builder offered a discount of ₹ 4,50,000. How much will Peter pay if he purchases that flat?

Answer 1

Given:

1. 2 BHK Under-Construction Flats (Cost ≤ ₹ 45,00,000): GST payable is 1%.

2. Bigger Under-Construction Flats/3 BHK or more (Cost > ₹ 45,00,000): GST payable is 3%.

3. Completed, Ready-to-Move-In Flats: GST is exempted (0%).

(i) 1. GST on an under-construction flat:

(a) An under-construction flat with a cost of ₹ 40,20,000

Since the cost (₹ 40,20,000) is less than or equal to ₹ 45,00,000, it falls under Condition (I) with a GST rate of 1%.

GST = 1% of ₹ 40,20,000

= `1/100 xx ₹ 40,20,000`

= ₹ 40,200

(b) An under-construction flat with a cost of ₹ 79,32,000

Since the cost (₹ 79,32,000) is greater than ₹ 45,00,000, it falls under Condition (II) with a GST rate of 3%.

GST = 3% of ₹ 79,32,000

= `3/100 xx ₹ 79,32,000`

= ₹ 2,37,960

2. GST on a completed (ready-to-move-in) flat:

Completed, ready-to-move-in flats fall under Condition (III) where GST is 0%.

GST = 0% of ₹89,00,000 = ₹ 0

(ii) Calculating the discounted price (Selling Price before GST)

Discounted price = Initial cost − Discount

= ₹ 96,84,000 − ₹ 4,50,000

= ₹ 92,34,000

Since the discounted cost (₹ 92,34,000) is greater than ₹ 45,00,000, it falls under Condition (II) (bigger under-construction flat) with a GST rate of 3%.

The GST amount:

GST = 3% of ₹ 92,34,000

= `3/100 xx ₹ 92,34,000`

= ₹ 2,77,000

Total amount paid by Peter = Discounted price + GST

= ₹ 92,34,000 + ₹ 2,77,000

= ₹ 95,11,020