AP Builders demanded avail of Composition scheme under GST

Rajahmundry OCT 15: Andhra Pradesh state builders have raised a demand that they should be allowed to avail composition scheme .They have made the demand based on the following reasons

# Easy compliance burden: Currently under the composition scheme tax compliance simplified and only quarterly filing is required. recently the government has also increased the limit of the scheme to Rs 1 crore.The tax rate under the scheme is 5 %.

High tax rates

# The builders have said that the currently 12 % GST is levied on the construction of houses but they can claim 6.5 % of Input Tax credit (ITC).However, land purchase is kept out of GST so that project cost has increased.Currently, manufacturers have to pay 2 % GST if they avail composition scheme but no ITC can be claimed.

High construction time

# The government has ordered the construction companies to pass on the input tax benefits to customers but builders are confused on how to pass on the benefits at the initial stages of project because they have no idea of what is the final cost of the projects as it takes a long time to complete and they have demanded that they would not claim any ITC under composition scheme.

However, the GST council has recently formed a committee to look after some of the issues and is also mulling to bring Real estate under GST so that companies and customers both can be benefitted.