A PROJECT ON

IMPACT OF GST ON VARIOUS CONSTRUCTION

PROJECTS
Submitted to:-

Bachelor in Commerce
Semester:- VI (2023-24)

Submitted by:-
Khushbu
Roll no.:- 210024303119
Under the Guidance of
Professor:- Dr. Aditi Garg

S.D.(P.G.) COLLEGE, GHAZIABAD

Affiliated to C.C.S. Universuty, Meerut

See format in guidelines.docx

 CERTIFICATES ABD DECLARATION BY STUDENT?

ACKNOWLEDGEMENT

DO ACK - College, Principal, HOD OF BCOM AND

FACULTY
I express my heartfelt gratitude to my teacher Dr. Aditi garg for her invaluable guidance
in completing my project.

I am also thankful to my parents and friends for their constant encouragement allnd
cooperation through out this projject
?

Name:- khushbu.
 CONTENTS

Page No.
CHAPTER- 1:- INTRODUCTION
1.1 Introduction
1.2 GST Advantages
1.3 Impact of GST on real estate
1.4 GST on under construction property – Affordable housing
1.5 Impact of GST on property prices – Luxury segment
1.6 Reverse charge mechanism in GST and its impact on construction costs
1.7 GST on ready properties
1.8 Conclusion

CHAPTER- 2:- OBJECTIVES OF THE STUDY

2.1 Problem statement
2.2 Objectives of the study
2.3 Additional Research questions USE CAPITAL LETTERS LIKE - Questions
2.4 Limitations of study

CHAPTER- 3:- LITERATURE REVIEW

3.1 Literature view
3.2 Conclusion

CHAPTER- 4:- COLLECTION PRIMARY DATA

4.1 Methodology
4.2 Research design
4.3 Type of research:
• Design of the research instrument
• Sample selection
• Research execution
• Analysis of Data

CHAPTER- 5:- ANALYSIS AND CONCLUSION

5.1 Hypothesis testing
5.2 Intermediate conclusion(s)

CHAPTER- 6:- CONCLUSIONS AND RECOMMENDATIONS

 6.1 Summary of findings
6.2 Overall conclusion
6.3 Recommendations
6.4 Bibliography

Abbreviations
CHAPTER-1 INTRODUCTION

[ use justified alignment]

1.1 Introduction:-
In Construction industry, there has always been a need to improvise the way of working
to achieve better results, saving in time, energy and cost. In doing so, there are lot of
shortcuts taken, lots of time saving activities are conducted which results in inadequate
data regarding all aspects of the projects. There are certain things which are completely
absent when it comes to documentation of all the project data on completion of project.
In all these things, there exists a scope of improvement, in order to regularize this, the
finance ministry has put up Goods & Service Tax (GST) in order to regularize the
construction sector. Introduction of Goods & Service Tax (GST) by the government of
India has led to a lot of ambiguity in the Construction industry because it’s not only a
new thing to deal with but, it will also regularize the so called “Unorganized Sector”.To
arrive at a conclusion, detailed studies starting from the gestation phase to the
handover phase would depict in detail where are the area of concern where the cost of
project has affected due to GST implementation. These studies not only give a clearer
picture of what all area of concern are to be seen to eliminate the
unnecessary cost but it will also help the project manager to analyze and form such
schedules that are met with as per the scheduled cost and time frame to nullify the
effects of cost variation in the building construction industry. So, to get a clear picture of
increase or decrease in cost due to GST, detailed study of a project before and after
GST is done for a check in cost variation.
A single tax structure is definitely a welcome move and the introduction of Goods and
Services Tax (GST) seeks to do just that by way of amalgamating a large number of
Central and State taxes into a single tax. GST will not only address the concerns of
double taxation but will also help in reducing the overall tax burden on goods and
services. Furthermore, it will also help in making Indian goods competitive
internationally thus providing a much-needed boost to the economy.
The Real estate industry is one of the most pivotal sectors in India and has seen a
phenomenal growth, not Justin cities, but even small towns. GST is another
development that will have a significant impact on this sector. Let’s take a look at the
impact of GST on the construction industry and the real sector.

1.2 GST Advantages:-

• Transparency and Accountability: - GST will lend a whole lot of transparency in the
real estate sector while also playing a major role in minimizing unscrupulous (black
money) transactions. Currently, there is a huge percentage in every projects where
expenditure goes unrecorded on the books.
GST by curbing the practice of fake billing on purchase-side will help cut down
cash component in construction, which in turn, will help in boosting
stakeholders‘ confidence.
• Input Tax Credit :- Although the GST rate of 18% on the supply of works
contract in the construction sector may be higher than the previous rates, the
regime of local composition schemes is over, though now they are eligible for
full input tax credit. However, many of the listed construction services such as
constructions of dams, roads etc. which were previously exempted are now
under the GST purview. This basically means the average construction contract
in the previous regime which used to hover around the 11–18% [ use words - percent]
range is now
chargeable at a flat rate of 18%. As a matter of fact, if you take exempted services into
consideration, this marked difference is more pronounced, like certain
infrastructure services are no more exempt in current regime. Having said that,
thanks to the availability of input tax credit, the construction sector is expected
to benefit in the long run. This is because, under the GST regime, the input tax
credit on the raw materials would result in an overall neutral tax incidence for
construction services. Additionally, with GST, real estate developers will have
access to free input tax credits on GST paid for services and goods purchased
by them while the rate of GST on outward supply is 12% including the value of
land. As the inward supply consist of many a items with more than 12% rate, it
is expected not a very significant cash flow will involve in paying GST on
outward supply. This will not only help in reducing the cost for the developers
but owing to this, they can even pass on the benefit of these credits as a
reduction to potential buyers.

1. In the GST system, when all the taxes are integrated, it would make possible the
taxation burden to be split equitably between manufacturing and services.
2. GST will be levied only at the final destination of consumption based on VAT
principle and not at various points (from manufacturing to retail outlets). This
will help in removing economic distortions and bring about development of a
common national market.
3. GST will also help to build a transparent and corruption free tax administration.
4. Presently, a tax is levied on when a finished product moves out from a factory,
which is paid by the manufacturer, and it is again levied at the retail outlet when
sold.
5. GST is backed by the GSTN, which is a fully integrated tax platform to deal
with all aspects of GST.

Overall, GST is expected to help bring a lot of required transparency and accountability.
Moreover, owing to the expected free flow of credit, developers should be able to enjoy
an increase in overall margin. Whether these benefits trickle down to the consumers is
yet to
be seen as the pricing in this sector tends to be dictated by market forces rather than
costing policies. Looking from the consumer point of view, the one primary advantage
would be in terms of decrease in the overall tax burden on goods and increased
transparency in tax system. GST will also help in eliminating unnecessary paperwork
while eliminating time wastage spent by good suppliers at various state borders. One
thing for sure is, the impact of GST will be felt albeit after a while.

1.3 Impact of GST on real estate:-

The construction of a complex building, civil structure, or a part thereof, intended for
sale to a buyer, wholly or partly, is subject to 12 per cent tax with full input tax credit
(ITC), subject to no refund in case of overflow of ITC. In other words, residential
construction services, will invite GST at the rate of 12 per cent, which will apply to
developers selling residential units before completion of construction to the home
buyers.
According to the JM Financial report on GST, for states with non-composite VAT
(Karnataka, Tamil Nadu, Andhra Pradesh), the transaction value changes marginally
from 10-11% to 12% under the new regime. With input cost credits available,
developers in these regions may witness improvement in margins in case no price
revision takes place (subject to the anti-profiteering clause).
Abhishek Anand, assistant vice-president (Equity Research), JM Financial Ltd,
explains: “In the current regime, states with composite VAT require developers to pay
lower VAT rates on the total property value without any input tax benefit (Maharashtra,
Haryana) or partial benefit (intra state offset- Bangalore). Under this regime, developers
pass on the transaction cost – VAT (1%) and service tax (4-5%) to buyers (total 5-6%).
Developers get offset for only the input service tax component. In the GST regime, the
transaction cost increases to 12%, with input credit available on both, services and
material. Property transaction costs will increase by 6%, in case no input credit is
passed on by developers. If developers pass on the input credit to buyers, the property
price increase could be restricted to 1-2%.” If the developers pass on the credits
completely and bring down the base prices, then, home buyers may marginally benefit
under the
GST regime.
Nevertheless, stamp duty will continue to be applicable, irrespective of whether the
property is under-construction or constructed, in the pre-GST and post-GST regime.

1.4 GST on under construction property– Affordable housing:-

It is important to note that housing projects (affordable housing is currently exempted
from service tax and a clarification is expected from the government for exemption from GST),
then, affordable homes may become cheaper under the GST regime.
 Government directs builders not to charge GST on affordable housing:
The government, on February 7, 2018, asked builders not to charge any Goods and Services
Tax (GST) from home buyers, as the effective GST rate on almost all affordable housing
projects is eight per cent, which can be adjusted against the inputcredit. It said builders can levy
GST on buyers of affordable housing projects, only if they reduce the apartment prices after
factoring in the credit claimed on inputs.In its last meeting on January 18, 2018, the GST
Council had extended the concessional rate of 12 per cent GST, for construction of houses
under the Credit- Linked Subsidy Scheme (CLSS) to promote affordable housing, which has
been given infrastructure
status in 2017-18 Budget. The effective GST rate, however, comes down to eightpercent, after
deducting one-third of the amount charged for the house/flat, towards
land cost. This provision was effective from January 25,2018.

1.5 Impact of GST on property prices – Luxury segment:-

In the case of a premium properties, while the basic construction cost may come down
a little, but as the input tax credit is limited to 12 per cent, it will not be sufficient to bring down
the fresh tax liability to nil because of the taxes paid on other expenditures.

GST rates for real estate – Input materials

HSN. Description of goods Rate
2523. Cement 28%
6802. Marble and granite 28%
2515. Blocks of marble and granite. 12%
2505. Natural sand, pebbles. 5%
8428 Lifts and elevators 28%
Give in table format

1.6 Reverse charge mechanism in GST and its impact on construction costs:-
The mechanism, where the recipient of services pays the service tax, is called as ‘reverse
charge mechanism’ (RCM). The same concept, with wider application, has been
borrowed from the service tax laws in the Goods and Services Tax (GST) regime.
A developer has to pay GST on services availed, like those provided by a person who
is located in a non-taxable area, services provided by goods transporters, legal services
provided by an individual or firm, etc. The developer also has to pay GST under the
reverse charge mechanism, on the services provided by government or local authorities,
like municipalities, etc. Nevertheless, some of the services provided by the government,
like renting of premises, specific services provided by the postal authorities, transport
of goods by railways or by state transport undertakings, etc., are outside the scope of
the GST, similar to the service tax regime.
A significant departure under the GST laws, compared to the erstwhile service tax
provisions, is that under the reverse charge mechanism in GST, a person who is registered
under the GST has to pay GST on all the services and goods that are procured
from a person who is not registered under GST.
This has significantly expanded the scope of the reverse charge mechanism for all taxable
persons and it will adversely affect the developers. Moreover, the tax payable under the reverse
charge mechanism under the GST, cannot be adjusted by the developer against the input credit
available from the GST paid on the inputs, but has to be paid by cash/bank
payment.

1.7 GST on ready properties:-

If the OC for the project has been received, then, no GST will be applicable. A CRISIL
report points out that at present, a developer pays excise tax and VAT, on inputs like
cement and steel, at 27.7 percent and 18.1 percent, respectively, which vary from state
to state. Now, under the GST regime, cement and steel will be taxed at 28 per cent and
18 per cent, respectively, while other inputs like paint and white goods, will be taxed at
28 per cent. The final product – the housing unit – will be taxed at 12 per cent, with
credit for taxes paid on inputs. As the tax levied on the entire cost including the land will be 12
per cent, the amount would be sufficient to provide for the input credit for developers. Hence, a
buyer opting for a ready-to- move-in apartment, is saved from the tax burden.
However, the tax calculations under the GST regime, for the real estate market, are not
so simple. For example, the GST on under-construction projects will be charged to
home buyers on the sale price but the credit can be availed by the developers, only on
the cost of construction. As the builder will have to pay the GST on the full project and
the input availed is only on the construction cost, there may be a gap that is no less than
30 percent. Consequently, construction property the developer will hike the prices in
that proportion, to make sure this gap is bridged.

GST on property rentals:-

“Credit/set-off of input GST is available to a developer, if the sale is executed prior to
obtaining the completion certificate or prior to first occupancy. However, this credit is
not allowed if the developer chooses to rent out the property. Hence, we might see a spike
in commercial rentals,” explains Amit Sarkar, partner and head – indirect taxes,
BDO India.
GST has also been levied on the renting of residential property, for use as an accommodation.
Consequently, tenants may witness a hike in rent payment under the
GST system, as there is no service tax applicable on residential properties, in the
existing system.

Will GST make home loans expensive?

Before evaluating the likely impact of the GST on home loan costs, it is important to
understand the components that will be impacted by the increased rates under the GST. The
main cost of taking a home loan, is the interest payment on the money. This cost
will not change, as there is no service tax or GST on it. Similarly, any stamp duty charged in
connection with the documentation of the home loan, will not change with the GST, as stamp
duty is not subsumed under theGST.However, there are various charges that are levied by
lenders on home loans. First and foremost is the processing fee that is paid at the time of taking
the home loan. At present, it is 15 per cent but it will go up by 3 per cent under the GST, to 18
per cent. This is generally a one-time cost and its overall impact on your home loan tenure, will
be insignificant. The banks may also recover other charges like advocate fees, valuation
charges, etc., in connection with the home loan, which will go up proportionately.Like the
processing fee paid at the time of application, you may have to pay prepayment charges, in
case you decide to prepay the home loan before the completion of its tenure or shift the home
loan to another lender. This is generally payable; in case the home loan is taken under a fixed
rate of interest. For floating rate home loans, banks cannot levy any prepayment charges.
Housing finance companies can, however, levy the
prepayment charges, if you decide to shift the home loan to another lender. However,
for payment of the home loan from your own resources, the housing finance companies
cannot levy any prepayment charges.
The lenders can also charge you for any EMI default, either due to return of the cheque
or ECS return, on which the GST rates will go up. So, it is practically on all the charges
that are recovered by the lenders that the GST rates will go up by 3 percent.

How are banks affected by the GST?

Construction Industry has two major Game Change one in form of RERA and now GST impact.
The old litigation in work contract and many landmark decision on service tax and vat law's now
no more valid. The construction entity to rework on cost structure by doing post and pre GST
impact analysis.They say ‘Change is the only constant’ but in order to succeed, change is not
only constant but it is also inevitable. After many reforming initiations like “Housing for all” and
RERA, the next thing that Real Estate along with all other sector is looking forward to is the
Goods and Services Tax. GST is set to get implemented on 1st July
2017. There are various goods and services which will have different rates prescribed
by GST, which may impact their cost. A homebuyer henceforth will have to pay 12%
GST to purchase a under construction house. If we look at the current scenario, real estate
sector was heavily taxed, therefore 12% single tax structure is definitely a welcome move. We
believe that existing multiple indirect taxes on the sector is higher and tax impact under GST
would be neutral. While the impact of GST on various sectors and goods is now known, industry
experts are still divided over how GST will impact real estate going ahead as clarity on the tax
slabs for services is still awaited.
Together with RERA, GST will go a long way in ensuring transparency in the realty sector and
growing buyer confidence. The existing channels include issues of multiple taxation, amounting
to indirect taxes and no uniformity. GST coupled with Real Estate Regulatory Act that has come
into effect on May 1, 2017, would ensure efficiency in the realty sector. GST will free
homebuyers and investors from the hassle of paying several state taxes at different levels,
therefore removing the double
taxation impact. Therefore 12% tax rate under GST regime looks favorable to the
industry.
If we talk about nitty-gritty’s of the GST for real estate sector, in some cases, even input credit
will be more than the GST levied on the finished product, but a developer can claim a maximum
credit to the extent of the GST he would be paying on the finished product. As per the provisions
of GST, it can be expected that GST may lead to input cost deflation for construction industry as
credit of taxes paid on various inputs used in the construction activities will be available which is
not available in current tax regime.
GST is also likely to boost foreign investment and benefit the NRI community for investment in
real estate because of a seamless all-inclusive channel available. The
simplification of taxation is probably the most positive aspect of GST and it will promise well for
foreign investments. It will also raise the confidence of the NRI market to invest in Indian real
estate.From the consumer point of view, the major advantage would be in terms of decrease in
the overall tax burden on goods. Currently it is estimated about 25%-30%. GST
will help in free transport of goods without stopping at the state borders for long hours.

One year of GST: Gains and losses

Home buyers in the affordable housing segment, specifically, homes of up to 60
sentimetres carpet area in size, have benefited significantly from the reduction of GST by four
per cent (from 12 per cent to eight per cent).
However, even almost a year after GST’s implementation, the only real clarity that
exists for property buyers is on the prevailing GST rate of 12 per cent, on under-construction
projects. There is still confusion about the amount of rebate that a prospective home buyer is
entitled to, on the back of the pass-over of ITC. The confusion is not only about the percentage
of ITC but also on the mode and tranche of the rebate. On their part, developers are stating that
they have to do
multiple calculations, to arrive at ITC and will pass it on, only during the final tranches.

GST on maintenance charges of housing societies

Under the earlier service tax regime, housing societies were required to register themselves
under the law of service tax, if the aggregate of maintenance charges levied by the housing
society exceeded Rs 10 lakhs in a financial year. However, under the Goods and Services Tax
(GST) regime, this limit has been doubled to Rs 20 lakhs. So, if the aggregate of maintenance
charges levied by the housing society exceeds the threshold of Rs 20 lakhs in a financial year, it
has to register itself under the GST laws and obtain a registration number.
While computing the limit of Rs 20 lakhs, even the exempt items like recovery of property tax
and electricity charges from the member, are to be taken into account. So, a housing society
has to collect GST from its members ,if the aggregate of the charges during a financial (whether
subject to GST or not) exceeds Rs 20 lakhs. Even though the threshold limit for registration is
Rs 20 lakhs for a housing society, it is not required to levy GST, if the amount of maintenance
charge for each of the flat or office does not exceed Rs 7,500 for month.

GST not applicable on sale of flats after issue of completion certificate,

Finance Ministry clarifies:
The Finance Ministry, on December 8, 2018, said the GST will not be levied on buyers
of real estate properties, for which the completion certificate is issued at the time of
sale. However, the Goods and Services Tax (GST) will be applicable on sale of under-
construction property or ready-to-move-in flats, where the completion certificate is not
issued at the time of sale, it said.“It is brought to the notice of buyers of constructed property
that there is no GST on sale of complex/ building and ready-to-move-in flats, where the after the
by the competent authority,” the ministry said in a statement.It further said affordable housing
projects like Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan
Mantri AwasYojana or any other housing scheme of state governments, attract eight per cent
GST, which can be adjusted by the builders against its accumulated input tax credit (ITC).
For buyers, this means that either their purchase cost will increase, if they decide to
purchase such a property, or the overall spread of options will reduce. After all, not all
unsold ready-to-move-in properties may possess a completion certificate.
Developers, on the other hand, may be left with no choice but to absorb the GST charges
in ready-to-move projects that have not been given completion certificates. If they attempt to
pass this additional burden on to their buyers, their ready-to-move-in units that do not have
completion certificates will be at par with under-construction projects, in terms of the cost to
buyers. The burden of unsold inventory in the primary market is likely to increase, as more
home buyers may now consider buying resale units, which are exempt from GST.
However, this announcement may be a blessing in disguise for the secondary market,
as buyers eyeing ready-to-move-in units will now certainly evaluate this option, rather
then paying 12 per cent GST on first purchase units.

1.8 Conclusion [no CONCLUSION IN CHAO ONLY IN LAST CHAP]

As a home buyer, it pays to know what the implementation of GST might bode for home prices
moving forward.
1. With GST, there should be a once-off increase in property prices across the
board
2. While developers may not bill home buyers for GST, they could transferthe
costs implicitly via the sale price
3. The overall price increase for new residential properties could be marginally
lower than that for new commercial properties.
1. The secondary home market should see a knock on effect in prices.
One of the most complex areas of the tax levied by the Centre and the States is works
contract and sale of property. Currently, such transactions are broken into three parts
– the value of goods and materials, value of services and value of land. The States apply
VAT to the goods portion and the Centre taxes the services portion, with no explicit tax
on the transaction value of land.
In GST regime, there will not be any concept of manufacture, sale or service etc. There
will be only one concept i.e. ‘Supply’. All the supplies will be categorized as Supply of
goods or Supply of Services. Construction activities will be ‘works contract’ which is
being categorized as ‘Services’. All builders and developers in India will be collecting
and paying CGST and SGST (i.e. Central GST and State GST. The place of supply of
the service is the location of the immovable property.

CHAPTER 2
OBJECTIVES OF THE STUDY
2.1 PROBLEMSTATEMENT:- in short what is the problem u are talking about in your
research? MAINLY RELATE TO YOUR TOPIC/TITLE
India is a federal country where Indirect Tax is levied by Federal and State Government.
Value Added Tax is levied by State Governments. Every State has authority to decide the Tax
rate and to control the Tax system as per their convenient. The Taxation power has been well
defined in Indian Constitution. The Constitution (122nd Amendment) Bill that seeks to usher in a
Goods and Services Tax (GST) regime in the country will finally be taken up for discussion in
Parliament. Finance Minister Arun Jaitley has been affirming that India will implement GST from
1st April 2016. It can be looked as - [THIS IS PAST . SO GIVE IN PAST TENSE NOW WHO
IS finance minister]
simplification of Taxes in country and avoiding unnecessary complexities. India is a federal
country which has various Tax regimes and structure, where Tax is levied by both
Governments. After the implementation of GST all the Indirect Taxes will be subsumed under an
umbrella, it will be a milestone in the history of Indirect Tax reform. In this paper, an attempt has
been made to examine the major features of GST. This paper has also focused on the problems
likely to be faced by Central and State Governments.

GST is deemed as one of the steps in making India as a country which has a high income tax
system, comprehensive, efficient, transparent and business-friendly. It is also considered the
world's best tax system based on the implementation of the country which has implemented the
GST.GST has just being applied in India. The government
and its crew are still in their way to spread out the information of GST in order to combat
confusion among people. Sales and contracts are made almost every day and some of
these transactions required people to pay the GST. It is an issue if people are still unaware or
confuse with the tax system of GST and become worst when people ignore and boycott not to
pay the tax. GST is a popular issue that is being discussed by people day to day, it is necessary
to know whether the students are aware of the government’s plan and do they have knowledge
on this issue. Therefore this study makes an attempt to analyze the College Student’s
Awareness and Knowledge on the Implementation of Goods and Services Tax (GST) in
Savakis. The concept of Goods and Services Tax (GST) is the biggest tax reform in decades
throughout the world in many countries, but India has just started implementing it to meet its
target of rolling out goods & services tax (GST). The research intends to focus on understanding
concept of goods and service tax and its impact on Indian economy.
Accordingly the objectives of this study are:-
• To highlight the needs of Goods and Services Tax in India
• To study the impact of GST on Indian Economy.
[TOPIC --VARIOUS CONSTRUCTION PROJECTS]
TITLES AND SUB TITLES USE SIMILAR FORMAT IN FULL REPORT
2.2 OBJECTIVES OF THE STUDY:-
  To understand how GST IS IMPLEMENTED IN VARIOUS SEGMENTS in IndiaN
ECONOMY.
 To study the concept of Goods and Services Tax (GST) and its impact on Indian
Construction Industry.
 To know the benefit of goods and service tax to economy, business and the industry and
consumers
 To know the advantages and challenges of GST in Indian context.

2.3 ADDITIONALRESEARCH QUESTIONS:-

THESE ARE SOURCES OF DATA-

The study focuses on extensive study of secondary data collected from government
websites, various national and international journals and articles, publications,
conference papers, government reports, newspapers, magazines which focused on
various aspects of tax structure and GST.
Traditionally India's tax regime relied heavily on indirect taxes. Revenue from indirect
taxes was the major source of tax revenue till tax reforms were undertaken during
nineties. The major argument put forth for heavy reliance on indirect taxes was that the
India's majority of population was poor and thus widening base of direct taxes had
inherent limitations.
But the Indian system of indirect taxation is characterized by cascading, distorting tax
on production of goods and services which leads to hampering productivity and
Slower economic Growth.

2.4 LIMITATIONS OFSTUDY:-

Every scientific study has certain limitations and the present study is no more
exception.
These are:
• The sample size was small and cannot be applied to the entire population.
• GST is new launched tax system so some complications are faced by
the people.
• The sample size is very small compared to the total population of the region.
• The study was conducted with the basic assumption that the information
given by the respondent is factual and represents their true feelings and
behavior.
➢ It is very difficult to check the accuracy of the information provided.
➢ Since all the products and services are not widely used by all the customers it
is difficult to draw realistic conclusions based on the survey.

CHAPTER 3
LITERATURE REVIEW
3.1 LITERATURE REVIEW:-
GST was first introduced by France in 1954 and now it is followed by 140 countries .
Most of the countries followed unified GST while some countries like Brazil , Canada
follow a dual GST system where tax imposed by central and state both. In India also
dual system of GST is proposed including CGST and SGST .
Govinda Rao (2009) “Goods and Service Tax – Some progress towards clarity” the
author in his article express his views on the first empowered committee report of state
finance ministers of Goods and Service tax to be implemented in India. He also explains
salient features, shortcomings of the proposed GST. He suggests that the proposed GST
model should overcome the shortcomings of VAT system. He alsothrowlight on the
challenges faced in the implementation of GST in India.
Ehtisham Ahmed and Satya Poddar (2009)“Goods and Service Tax Reforms
and Intergovernmental Consideration in India” and found that GST introduction will provide
simple and transparent tax system with increase in output and productivity of
economy in India. But the benefits of GST are critically dependent on rational
designofGST.
● (Saira et al, 2010) , Based on the history of the implementation by the other countries
around the world, most of the countries received a positive impact in terms of their
revenue, despite the success of GST implementation the Malaysian citizens still feel
uncertain with the GST, (Sairaetal, 2010). The findings from the study showed that the
majority of Malaysians not convinced with the GSTsystem,
● Dr. R. Vasanthagopal (2011) , Conducted a study on , “ GST in India : A big leap
in the Indirect Taxation System” and concluded that switching to seamless GST from
current complicated indirect tax system in India will be positive step in becoming Indian
economy . Success of GST will lead to its acceptance by more than 130 countries
in world and a new preferred form of Indirect Tax System in Asia also.
● According to Torgler (2011) ,tax morale is important to taxpayer awareness. On the
other hand, research by Tekeli (2011) using multiple regression analysis show that tax
morale has insignificant relationship on tax awareness. A Tekeli (2011) conclusion is
supported study by regarding cause and consequences of tax morale.
● Research by Mustapha and Palil (2011) , stated that the influence of compliance
behavior towards individuals’ awareness has been proven in various researches. From
the findings of Razak and Adafula (2013); Santi (2012) they found that taxpayers’
awareness is significantly associated with tax compliance and this is also supported by
study Jatmiko(2006).
Dr. R. Vasanthagopal (2011) studied “GST in India: A Big Leap in the Indirect
Taxation System” and concluded that switching to seamless GST from current
complicated indirect tax system in India will be a positive step in booming Indian
economy. Success of GST will lead to its acceptance by more than 130 countries in
world and a new preferred form of indirect tax system in Asia also.
Dr. R. Vasanthagopal, (2011)“GST in India: A Big Leap in the Indirect Taxation
System”, found that the positive impacts are dependent on a neutral and rational design
of the GST. Balancing the conflicting interests of various stakeholders, complete
political commitment for a fundamental tax reform with a constitutional amendment,
the method of valuation for levying the tax is to be required.
Jana V. M., Sarma& V Bhaskar (2012) “A Road Map for implementation of Goods
and Service Tax”, from the study it is found that the steps to be undertaken to implement
the comprehensive tax system i.e., GST. The authors have thrown light on the
constitutional amendment required for the implementation of GST in India.
Beri Yogita (2012) “Problems and Prospects of Goods and Services Tax (GST) in
India” in this article the author say that India has witnessed with number of tax reforms
since Independence. The implementation of GST will become major indirect reform in
India though is subsumes many existing indirect taxes like central excise duty, customs
duty, service tax, additional duties etc. by implementation of GST there will be levy of
central taxes both on goods and services which integrates and widen the tax base.

Jana V. M., Sarma& V Bhaskar (2012) studied “The Road Map for implementation
of Goods and Service Tax”. He found that the steps to be undertaken to implement the
comprehensive tax system i.e., GST. The authors have thrown light on the constitutional
amendment required for the implementation of GST in India.
Saayed Mohd Ali Taqvi (2013) studied the challenges and opportunities of Goods and
Service Tax in India. He explained that GST is only indirect tax that directly affects all
sectors and sections of our country. It is aiming at creating a single, unified market that
will benefit both corporates and economy. He also explained the proposed GST model
will be implemented parallel by the central and state governments as Central GST and
State GST respectively.
Syed Mohd Ali Taqvi (2013) “Challenges and Opportunities of Goods and Service
Tax in India” the researcher explains the GST is only indirect tax that directly affect all
sectors and sections of our country. It is aiming at creating a single, unified market that
will benefit both corporates and economy. He also explain the proposed GST model
will be implemented parallel by the central and state governments as Central GST and
State GST respectively.
● Pall et al. (2013) , study by using multiple regression analysis, the researchers found
out that there are significant relationship between awareness and tax knowledge. When
individuals have knowledge related to the tax systems, people will be more willing to
respect the tax systems and improved individuals’ awareness. Further, Jatmiko (2006)
also conclude that awareness can be developed from the knowledge and the
understanding. Palil et al. (2013) and Jatmiko conclusions is also supported study by
Tayib (1998) identified that individuals’ awareness towards the tax system can increase
when the individuals has knowledge about the tax. This makes tax knowledge and tax
awareness has significant relationship and when the individuals or the taxpayers have
knowledge about it and it will make it easier for them to study and follow the tax rules.
● Djawadi and Fahr ( 2013) , This study is pointed out that knowledge about tax is
important to increase the thrust of authorities and citizens.The researcher used structure
equation modelling to examine the relationships between tax awareness and tax knowledge and
researcher found that tax knowledge has positive relationship with tax awareness . Hence,
taxpayers will be more aware about tax system when they have knowledge and understanding
towards the tax system.
AgogoMawuli (2014) studied “Goods and Service Tax-An Appraisal” and found that
GST is not good for low-income countries and does not provide broad based growth to
poor countries. If still these countries want to implement GST then the rate of GST
should be less than 10% for growth.
Jaiprakash ( 2014) in his research study mentioned that the GST at the Central and the
State level are expected to give more relief to industry, trade, agriculture and consumers
through a more comprehensive and wider coverage of input tax set-off and service tax
setoff, subsuming of several taxes in the GST and phasing out of CST. Responses of
industry and also of trade have been indeed encouraging. Thus GST offers us the best
option to broaden our tax base and we should not miss this opportunities to introduce it
when the circumstances are quite favorable and economy is enjoying steady growth
with only mild inflation.
Nitin Kumar (2014) studied “Goods and Service Tax- A Way Forward” and concluded
that implementation of GST in India help in removing economic distortion by current
indirect tax system and expected to encourage unbiased tax structure which is
indifferent to geographical locations.
Nishitha Guptha (2014) in her study stated that implementation of GST in the Indian
framework will lead to commercial benefits which were untouched by the VAT system
and would essentially lead to economic development. Hence GST may usher in the
possibility of a collective gain for industry, trade, agriculture and common consumers
as well as for the Central Government and the State Government.
SaravananVenkadasalam (2014) analyzed the post effect of the goods and service tax
(GST) on the national growth on ASEAN States using Least Squares Dummy Variable
Model (LSDVM) in his research paper. He stated that seven of the ten ASEAN nations
are already implementing the GST. He also suggested that the household final
consumption expenditure and general government consumption expenditure are
positively significantly related to the gross domestic product as required and support
the economic theories. But the effect of the post GST differs in countries. Philippines
and Thailand show significant negative relationship with their nation’s development.
Meanwhile, Singapore shows a significant positive relationship.
GirishGarg, (2014) - “Basic Concepts and Features of Good and Service Tax in
India”, it is found that GST is the most logical steps towards the comprehensive
indirect tax reform in our country since independence. GST will create a single,
integrated Indian market to make the economy stronger. Under GST, the taxation
burden will be divided equitably between manufacturing and services, through a
lower tax rate by increasing the tax base and minimizing exemptions. Through this it
is likely to improve tax collections and Boost India’s economic development by
breaking tax barriers between States and integrating India through a uniform tax rate.
Pinki, Supriya Kamna & RichaVerma (2014) Goods and Service Tax - Panacea
for Indirect Tax System in India “it is found that the GST is India’s most ambitious
indirect tax reform plan, which aims at removing the cascading effect of tax. The
movement of GST was declared in 2008 and supposed to be in force by 2010. Due to
various reasons it could not be in force. GST has been implemented in more than 150
countries which will leads to economic growth of the country.
● Pinky Supriya Kamma and Richa Verma ( July 2014) studied, “ Goods and
Service Tax “ Panacea for indirect tax system in india “ and concluded that the new
NDA government in India’s positive towards implementation GST and it is beneficial
for central government , state government and as well as for consumers in long run if
its implementations backed by strong it infrastructure.
● Agogo Mawuli (May 2014) studied , “ Goods and Service Tax An Appraisal “ and
found that GST is not good that low income countries and does not provide broad based
growth to poor countries. If still countries want to implement GST then the rate of GST
should be less than 10 % for growth.
● Boonyarat et al. (2014), the researcher used Structure Equation Modeling (SEM) to
examine the relationships between tax awareness and tax knowledge and the researcher
found out that tax knowledge has positive relationship with tax awareness. Hence,
taxpayers will be more aware about tax system when they have knowledge and
understanding towards the tax system.
● Nishitha Guptha (2014) in her study stated that implementation of GST in the Indian
framework will lead to commercial benefits which were untouched by the VAT system
and would essentially lead to economic development.
● Jai Parkash ( 2014) . in his research study mentioned that the GST at the Central and
the State level are expected to give more relief to industry, trade, agriculture and consumers
through a more comprehensive and wider coverage of input tax set-off and service tax set off,
subsuming of several taxes in the GST and phasing out of CST.
● Venkadasalam (2014) ,has analyzed the post effect of the goods and service tax
(GST) on the national growth on ASEAN States using Least Squares Dummy Variable
Model (LSDVM) in his research paper. He stated that seven of the ten ASEAN nations
are already implementing the GST. He also suggested that the household final
consumption expenditure and general government consumption expenditure are
positively significantly related to the gross domestic product as required and support
the economic theories. But the effect of the post GST differs in countries.
● International Journal of Scientist research and management (2014)
,GirishGargh Assistant Professor from PGDAV College University of Delhi has
published paper titled Basic Concepts and Features of good and service tax in India. In
this paper he has given the outline of GST and what does this tax system wants to
achieve with threats and challenges opportunities that the free market economy
canbring.
ShefaliDani (2015) has suggested that GST administration is an irresolute endeavor to
legitimize backhanded expense structure. Roughly more than 150 nations have executed
GST idea. The legislature of India must examination the GST administration set up by
different nations and furthermore their aftermaths previously actualizing GST. IT is the
need of hour that, the legislature must make an endeavor to protect the huge poor
populace of India, against the expansion because of execution of GST. GST will
disentangle its current roundabout duty framework and shouldexpel wasteful aspects
made by the current heterogeneous expense framework, just if there is a reasonable
agreement over issues of edge constrain, income rate, and incorporation of oil based
commodities, power, alcohol and land.
SrinivasK. R (2016) in his article “Issues and Challenges of GST in India” mentioned
that central and state governments are empowered to levy respective taxes as per the
Indian constitution which is likely to change the complete scenario of present indirect
taxation system. GST will be a compressive indirect tax structure on manufacture, sales
and consumption of goods and services throughout India, to replace the various indirect
taxes levied by the both the governments.
● Mohammad Ali Roshidi (2016) ,conduct a study on “ Awareness and perception
of tax payers towards Goods and Service Tax implementation.The study attempts to find out
what level of awareness and perception to GST taxpayers in Malaysia. This study only consist
of 256 civil service servants of the secondary school teachers in the kaulakangsar, Perak. Data
collected using questionnaire. The result shows that moderate and majority of respondents give
a high negative perception to the GST. The eventually causes the majority of respondents did
not accept implementation of GST in Malaysia.
● International Journal of innovative studies in sociology and humanities (2016) ,
A study on impact of GST after implementation Milan-deep Kour and his co-authors
Assistant Professor from Eternal University himachal Pradesh talks about the impact of
GST and implementation of it, its benefit and challenges. He also emphasizes that GST
is going to change things in currentsituation.
● Ahamd et al. (2016) ,found that the level of awareness of the GSTis still not reached
a satisfactory level. This is because the study involved only general questions that
should be known by the respondents as end users. This cause the respondents gave high
negative perception of the impact of implementation of GST. The respondents received less
information and promotion of the authorities. Most of the respondents were unclear whether the
goods and services are not subject to GST. Furthermore, due to the lack of information on GST,
the respondents had a high negative perception. Therefore, the
government must convince that GST will not have a lasting impact on the public as
particularly convincing end users that no increase in prices of goods and services.
Poonam (2017) in her study cleared that in the system of indirect taxation GST plays a
very important role. The cascading and double taxation effects can be reduced by
combing central and state taxes. Consumer’s tax burden will approximately reduce to
25% to 30% when GST is introduced and then after Indian manufactured products
would become more and more inexpensive in the domestic and international markets.
This type of taxation system would directly encourage economic growth. GST with its
transparent features will prove easier to administer.
With the above reviews we can assume that GST is a tax reform which will change the
scenario of the country as a support for this review study.
● Times of India (26 July, 2017) , page no 1&17 it is stated that Sweet makers are
confused with fixing the tax for their product as the ingredients used in the sweets.are taxed
separately as raw material and as finished goods the products its taxing is
different ex. Plain burfi is 5% taxed but chocolate burfi is fixed with 28%. Plain burfi
mixed with other dry fruits is of 12%. This taxing system makes the Sweet makers to
get confused on how much GST to be fixed for which product.
● Times of India dated ( 27 July , 2017) , stated that the GST implication across
different places for the same product has wider differences which the consumers are
unaware, resulting them in surprise. Ex A Rasamalai sold in counter at a shop is taxed
with 5% but if it is served in the hotel it is taxed with 18% this has resulted in difference
of consumers shopping to purchase the similar products
● Shakwipee( 2017) , A study conduct on the inquring the level of awareness towards
GST among the small business owners in Rajasthan State, found that the main areas to
be focused include training errors and computer software availability.
● Vineet Chauhan (2018) ,Conduct a study on “ Measuring Awareness about
implementation of GST.” A study survey of small business unit of Rajasthan State in
India. The study seeks to evaluate the awareness of the business owners about GST
difficulties they face to encase of the current awareness about it. 148 small business
owners were analyses in order to identify the awareness about GST from Rajasthan state
and the kind and extent of relief provided and the implementation of the provision under
GST Law.
● Bar hate (2018) , found that people have no doubt whatsoever regarding the proposed
benefits of GST irrespective of their business type, legal status of business for the reason
being they feel irritated by the present system which appears to be cumbersome. Most
respondents believe that GST will bring monetary gains to their business and do not
anticipate any significant boost in tax compliance costs. Interestingly, respondents
expect the spending on tax compliance to go down after GST is implemented. The lack
of information coupled with the apathy towards reforms may paralyze the speedy
implementation of this system especially in small towns where still not a single
orientation programs have been planned and executed till date by competent authorities.
● Poonam (2018) , The biggest problems in Indian tax system like Cascading effect &
tax evasion, distortion can be minimized by implementing GST. After amalgamation of
local state and central taxes competitiveness of industry, exporter and company will
increase. The extra revenue which can be generated from broaden tax base structure can
be utilized for the growth of nation.

GST will swift government focus on depending direct tax (income) to indirect tax.
Definitely due to small income in tax collection base, GST will be a strong boost to government
revenues. Hopefully with these amount of revenue challenges that the
government face in term of deficit budget and debt can be clear by 2020.
As it is a consumption tax, it appears that Malaysian GST will also act as an effective
dragnet for tax evaders and illegal immigrants who pay no income tax. The payment
made to BRIM recipient will offset most of the GST’s impact on the poor.
GST will give some impact on consumer expenditure due to rise in goods and services
price, however with increase of revenue government spending aspect to be more and
firm will continue to invest as export goods will exempted from tax. GDP will increase when
government spending and investment increase. Hopefully the implementation of GST can
provide good platform for the country to become develop country with high-income.

CHAPTER 4
 COLLECTION OF PRIMARY DATA

4.1 METHODOLOGY:-
Research is a logical and systematic search for new and useful information on a particular topic.
Research methodology is a systematic way to solve a problem. It is a science of studying how
research is to be carried out. Essentially, the procedures by which researchers go about their
work of describing , explaining and predicting phenomenon are called research methodology.
About my Research Problem :
The present research is exploratory in nature. Since GST is a new phenomenon in India,
there are hardly any studies in this area. Specially there is a huge gap of empirical and
behavior studies on GST in India. The study tries to find the significance of popular
perception regarding GST.
4.2 RESEARCH DESIGN:-
A good research design has characteristics viz, problem definition , time required for research
project and estimate of expenses to beincurred the function of research design is to ensure that
the required data are collected and they are collected accurately and economically. A research
design is purely and simply the framework for a study that guide the collection and analysis
data. In this project the two basic types of research design aroused
➢Exploratory Research:
All research projects must start with exploratory research. This is a preliminary phase
and is absolutely essential in order to obtain a proper definition of problem in hand. The
major emphasis on the discovery if ideas and in sights . The exploratory study is
particularly helpful in breaking broad and vague problems in to smaller, more precise
sub problem statements . Exploratory research is also used to increase the familiarity
with the problem under investigation.
➢Descriptive Research:
It is the design that one simply describe something such as demographic characteristics
of people .The descriptive study typically concerned with determining frequency with
which something occurs or how two variables vary together what, when and why apex of the
research . It requires formulation of more
specific hypothesis and the testing these through statically inference technique.
This is the research design of the study and then it comes to develop the research plan
, which means that what to do before going for the actual interpretation and it is
discussed below .

How to Calculate GST on Under Construction Flat 2019?

You have almost skimmed every possible and necessary information on the latest updates
on real estate current GST rates. Therefore now you can somehow scrutinize well and will
be able to figure out how to calculate the GST on a flat purchase. Let us make it easier for
you to know the GST rate on under construction property by breaking the calculation process
into steps. Scroll down.
1. The ones who are about to purchase residential flats for them, the government has
offered relief. You are subjected to pay 18% of GST on the under construction
property.
2. Out of this 18%, deduct 1/3 and rest is the payable GST rate i.e., 12%. The
deduction made is of land value which is tax-free inGST.
3. Now the 33rd GST amendment comes into the picture. It slashed the 12% GST to
5% on the under construction property and ready to move in flats with no CC
issuance.
4. This 5% of GST on under construction property will be there only in the absence of
ITC Input Tax Credit).
5. During the calculation of GST for under construction property, the whole amount is
being considered i.e., the value of building and land too.
6. The GST will always be applicable for under construction properties.
A single tax structure is definitely a welcome move and the introduction of Goods and
Services Tax (GST) seeks to do just that by way of amalgamating a large number of
Central and State taxes into a single tax. GST will not only address the concerns of double
taxation but will also help in reducing the overall tax burden on goods and services.
Furthermore, it will also help in making Indian goods competitive internationally thus
providing a much-needed boost to the economy.
• Compliance and Efficiency :-Thanks to the abolition of various central,state
and local taxes, GST will permit quicker and easier transfer of goods between
states.By implementing a uniform tax structure,the entire real estate sector will
stand to benefit thus improving the tax compliance. GST will also inadvertently
replace most indirect taxes, with a single tax, thereby ensuring an overall efficient
taxation system.
• Double Taxation :-The Real estate sector was plagued with several issues
regarding multiple taxation which amounted to over 25 percent in indirect taxes.
GST will break the shackles of double taxation by freeing home buyers and
investors from the hassle of paying several state taxes at different levels.
• Stamp Duty and Registration :-The remaining hurdle is that Stamp duty is
not to be subsumed under GST and hence will continue as it is today. There is no
provision for input tax set off available for the stamp duty paid for the land which
basically goes against the entire premise of GST. Moreover, there would be no
change in registration charges as well on real estate sale transactions. The silver
lining as such is that GST will subsume the service tax and value added tax (VAT)
charges which were payable on sale of under-construction properties.
TAXABILITY OF WORKS CONTRACT UNDER PREVIOUS TAX
REGIME
• Various provisions were in place to separately determine the value of taxable goods
and taxable services in the total consideration of a works contract.
• VAT was charged on the value of sale of goods component and Service Tax was
charged on the value of service component
• Cascading effect of different taxes. For Example:-Software
• Confusions and legal disputes
IMMOVABLE PROPERTY
a) Land&
b) Building (other than under construction sale of flats/unit)
SCHEDULE II OF THE CGST ACT, 2017
• Schedule II of the CGST Act, 2017, deals with the classification of Activities into
Supply of Goods and Services.
• Entry number 5(b) of Schedule II mentions clearly that the “construction of a complex, building,
civil structure or a part thereof, including a complex or building
• intended for sale to a buyer, wholly or partly…” will be treated as a Supply of
Service.Rate of construction services where value of land is included:
ChSecHeadingDescription Of ServiceRate9959954(I) Sale Of Under Construction Flats
Involving Transfer Of Property In Land Or Undivided Share In Land18% After Deduction Of
1/3rd Of Total Amount Charged As The Value Of Land Or Undivided Share In Land
• Further, Entry number 6(a) of Schedule II reads as follows: “The following
composite supplies shall be treated as a supply of services, namely: —
(a) works contracts defined in clause (119) of section2;”
Rate of Works Contract Service-
Ch Sec Heading Description Of Service Rate 9959954Ii) Composite Supply Of Works
Contract As Defined In Clause 119 Of Section 2 Of CGST, 2017.18%(Iii) Specified
Composite Supply Of Works Contract12%(Iv) Construction Services Other Than (I) And
(Ii) Above18%

TIME OF SUPPLY OF SERVICE:-

PLACE OF SUPPLY IN GST

• The place of supply of the service is the location of the immovableproperty.
Example-If site is at New Delhi and office is at Gujarat. Immovable property is build up in
New Delhi, hence It will be the place of supply of services.

INPUT TAX CREDIT ON WORKS CONTRACT UNDER GST

• Input Tax Credit of GST paid on Works contract will be allow edif
• the output supply is also Works Contract, and;
• When the Contract is for construction of Plant and Machinery.
Apart from the above two, no Input Tax Credit will be available for works contracts for
construction of immovable property. For Example- Hotel.

Input Tax Credits — Implications

Procurement Pre-GST Position Post-GST Position Materials •No Cenvat Of
Excise Duty, CVD, Etc Paid On Materials
• No VAT Credit On Materials
Full ITC Available Input Services Cenvat Credit Of Service Tax Was Available Full
ITC Available Capital Goods Cenvat Credit Of Excise Was Available In Two Trenches
Full ITC Available In The Year Of Receipt
Hmm
ABATEMENT AND COMPOSITION SCHEME
• No abatement is till now available for works contracts under GST.
• Works Contractor cannot opt for composition scheme as a works contract is treated
as a supply of services.
• For supply of services, only restaurant business are allowed to be registered under
Composition Scheme.
Sale Of Flats And Units- Under Construction4.50%1%5.50%18% (1/3 Reduction Of Land)Joints
Development- Owner Area4.50% To 6%NIL4.50% To 6%18% (1/3
Reduction Of Land)Rehabilitation Of Flats6%NIL6%18%
ISSUES
Pre GST- Joint Development (Area Sharing)
Land Owner transfers certain percentage of development potential to Developer
In return Developer gives owners flat to Land Owner, also developer sales his developed
flats to customers.

Present regime:
1. Service tax:
* Flats allotted to Land owner — service tax payable under works contract category or
construction service on the value of development potentials received
* Saleable flats — service tax payable on sale of under construction units

1.VAT:
* Not payable on flats allotted to land owner as it amounts to barter
* Payable on saleable flats under construction
CONTINUOUS SUPPLY OF SERVICE
It means a supply of services which is provided or will be provided continuously or on
recurrent basis under a contract for a period exceeding three months with periodic payment
obligations
Where the due date of payment is ascertainable from the contract Time of supply shall be the
due date of payment..
Where the due date of payment is not ascertainable from the contract Time of supply it will be
earliest of
1) date of receipt of payment or
2) the date of issue of invoice
Where payment is linked to the completion of an event Time of supply it will be earliest of
1)date of receipt of payment Or
2) completion of event where payment is linked to completion of event.

Time of supply:
* Receipt of development rights amounts to advance receipt of consideration in kind
* Hence, date when irrevocable rights are received will be time of supply
* Receipt voucher has to be issued by developer to owner on receipt of development right
Valuation to be done as per GST Valuation Rules
Taxable @ 18% or 18% (after deducting land value) depending on facts of the case
Area Sharing Agreement- Section 7(1) a, “ Supply Means” Supply made and Agreed to be
made
Taxability of saleable flats:
Taxable on transaction value under construction service category @ 18% (after deducting land
value)
Taxability of development rights in the hands of ownerTransfer of development rights by
landlord can be said in course or furtherance of business As per Sch II Entry (2) License to
occupy land to builder is supply
Refund to customer on cancellation
Present regime:
Rule 6(3) of Service tax Rules, 1994 permits Builder to adjust service tax refunded to
customer on cancellation of flats/ units against his tax liability of the month in which
refund is made

GST regime:
Whether builder is entitled to issue credit note u/s 34 and claim the tax adjustment?
Provision speaks of deficiency of service and not “non-provision of service”
Does this mean that adjustment of GST refunded on advance against GST liability is not
permissible?
Section 54(8)© permits refund of tax paid on supply which is not provided either wholly
or partiallyDebit note and Credit note in Works Contract- DN and CN should be issued by
supplier only U/s 34 of GST Act
Sale of Completed flats — Reversal of ITC
Section 17(2) provides that where goods or services are used partly for effecting taxable
supplies and partly for exempt supplies, ITC credit attributable to taxable supplies can only
be takenExempt Supply is defined u/s 2(47)] to include non-taxable supply
Non-taxable supply is defined u/s 2(78) of the Act to mean:
Supply of goods or services or both
Which is not liable to tax under CGST or IGST Act Section 17(3) specifically includes sale of
building and sale of land as exempt supply
Sale of completed flat will be exempt supply for the purpose of reversal of ITC u/s 17(2)
of the Act from start of the project.
Also builder may liable to pay interest on such reversal of credit for the period starting
from the date of completion certificate till date of actual reversal.

IMPACT ON CONSTRUCTION AND REAL ESTATE SECTOR

• Positive Impact
• Easy Compliance
• Availability of Input Tax Credit
• Possible reduction in prices
• Excise Duty, VAT, Service tax get replaced by GST

4.3 RESEARCHEXECUTION
SAMPLINGTECHNIQUES:-
Basis of Convenience Sampling (Non-Probability)
STATISTICAL TOOLS
Following MS Office tools are being availed while preparing the project:
• MS Excel: Pictorial & graphical representation of data
• MS Word: Preparation of project & other reports
METHODS FOR PRESENTATION OF DATA
• Traditional method of data representation i.e. Pie chart, Barchartetc.
• Average of responses – No. of Responses/Total Responses*50
Sample size:
The sample size shorted out from the population (universe set) is 100 nos. to draw the
conclusion of the study.
Sampling Technique: The Project will be non-probability sampling.
Research Type: The project will be exploratory research type.

4.4 ANALYSIS OF DATA:-

DATA COLLECTION SOURCES

Primary Data:
Primary data is basically the live data which I collected on field while doing cold calls
with the customers and I shown them list of question for which I had required their
responses.
Secondary Data:
Secondary data for the base of the project I collected from intranet and from internet,
magazines, newspapers etc.
SAMPLING TECHNIQUE:
Sampling Technique
Sampling techniques can be broadly classified in to two types:
➢ Probability Sampling.
➢ Non Probability Sampling.
Tools for analysis
➢ Bar chart (Bar charts will be used for comparing two or more values that will
be taken over time or on different conditions, usually on small dataset)
➢ Pie-chart (Circular chart divided in to sectors, illustrating relative magnitudes
or frequencies)
Tools and Techniques
As no study could be successfully completed without proper tools and techniques,
sames with my project. For the better presentation and right explanation I used tools of statistics
and computer very frequently. And I am very thankful to all those tools for
helping me a lot. Basic tools which I used for project from statisticsare-
- Bar Charts
- Piecharts
- Tables
Bar charts and pie charts are really useful tools for every research to show the result in
a well clear, ease and simple way. Because I used bar charts and pie cahrtsin project for
showing data in a systematic way, so it need not necessary for any observer to read all
the theoretical detail, simple on seeing the charts any body could know that what is
being said.
Technological Tools
Ms-Excel
Ms-Access
Ms-Word

CHAPTER 5
ANALYSIS AND CONCLUSION

DATA ANALYSIS AND INTERPRETATION

Q1. How do you get know about GST? From:

Table 1:

PARTICULARS NO. OF RESPONDENT PERCENTAGE

Friend/family 15 30%

Mass media 20 50%

Online source 50 20%

Other 15 -

TOTAL: 100 100%

Interpretation: Most of the Client knows about GST From Mass Media.

Q2. Gender
Table 2:

PARTICULARS NO. OF RESPONDENT PERCENTAGE

Male 70 70%

Female 30 30%

Total 100 100%

Interpretation: 70% of them are male.
30% of them are female.

Q3. Education ?
Table 3:

OPTION NO. OF RESPONDENTS PERCENTAGE

SSC 10 10%

HSC 20 20%

GRADUATE 30 30%

POST GRADUATE 40 40%

TOTAL 100 100%

Interpretation: From the above diagram it is stated that most of the dealer are literate.

Q4 . Professional status ?

Table 4:

OPTION NO. OF RESPONDENTS PERCENTAGE

Student 35 35%
 Working professional 64 64%

Unemployed 1 1%

Total 100 100%

Interpretation: From the above diagram it is stated that most of the persons who have
answered were the constructor.

Q5. Do you agree with the implementation of GST in India?

Table 5:

PARTICULARS No. OF RESPONDENTS PERCENTAGE

YES 70 70%

NO 30 30%
 TOTAL 100 100%

Interpretation: Most of the Client agree about the implementation of GST in India.

Q6. Do you think all businesses need to be registered under GST?

Table 6:

PARTICULARS No. OF RESPONDENTS PERCENTAGE

YES 80 80%

NO 20 20%

TOTAL 100 100%

Interpretation: 80% user think that all businesses need to be registered under GST.

Q7. Which system do you think is more beneficial to both Government

and people?
Table 7:

PARTICULARS No. OF RESPONDENTS PERCENTAGE

GST 75 75%

Others 25 25%
 TOTAL 100 100%

Interpretation: 75% user think that Goods & Service Tax is more beneficial to both
Government and people

Q8. GST will affecting small business very badly.

Table 8:

PARTICULARS NO. OF RESPONDENTS PERCENTAGE

Strongly agree 65 65%

Agree 27 27%

Neutral 8 8%

Disagree 0 0%

Strongly disagree 0 0%

Total 100 100%

Interpretation: 65% customer are Strongly Agree that GST will affecting small business
very badly. 27% customer are Agree that GST will affecting small business very badly.
And rest are are not Agree.

Q9. GST is a very good tax reforms for India?

Table 9:-

PARTICULARS NO. OF RESPONDENTS PERCENTAGE

Strongly agree 10 10%

Agree 15 15%

Neutral 40 40%

Disagree 25 25%

Strongly disagree 20 20%

 Total 100 100%

Interpretation: From the above graph shows that Most of customer says excellent for Using
GST.

Q10. GST will make the construction projects slower?

Table 10:

PARTICULARS NO. OF RESPONDENTS PERCENTAGE

Yes 90 90%

No 10 10%

Total 100 100%

CHAPTER- 6
CONCLUSIONS AND RECOMMENDATIONS

1.1 SUMMARY OF FINDINGS:

• Most of the Client know about GST From Mass Media.
• Most of the Client agree about the implementation of GST in India.
• Most of the Client think that implementing GST will cause higher price of goods & services.
• 80% user think that all businesses registered under GST.
• 65% user think that Goods & Service Tax is more beneficial to both Government and people.
• 62% user think that GST will burden the people/consumer.
• 75% user think INDIA is ready for implementing GST system.
• From the above graph shows that Most of customer says excellent for using GST.
• From the above graph shows that Most of customer says excellent for using GST.
• From the above graph shows that Most of customer are neutral about that GST is very good
tax reforms for India. 25 % customer are disagree about that GST is very good tax reforms for
India.
• From the above graph shows that Most of customer are neutral about that GST Has Increased
The Various Legal Formalities. 25 % customer are Strongly Agree about that GST Has
Increased The Various Legal Formalities. And rest customer are are Agree about that GST Has
Increased The Various Legal Formalities.
• 45% customer are Strongly Agree about GST has increased the tax burden

1.2 OVERALL CONCLUSION

GST shall be the mother of all Indian tax reforms of this centaury and it would subsume
most (if not all) of the existing Central and State level taxes on supply of goods and
services.
Accordingly, GST would have a significant impact on business environment and its
operations. When undertaking oversight of organizational readiness to adopt GST,
independent directors need to focus on the following aspects:
1 GST will have a multi-fold impact on operations – Besides the fiscal
impact and tax compliance, GST will have an impact on cash flows, product pricing,
supply chain arrangements, procurement, revenue recognition and the IT systems. It is
therefore important to assess whether the organization is undertaking a holistic impact
assessment of GST encompassing all of the above.
2 Assess the impact on financial results – GST will have an impact on the financial
statements; for example the top-line may get reduced in some cases (e.g. traded items) due to
elimination of tax cascading. The gross margins will also undergo changes as Cost of Goods
Sold may undergo changes as a result on input tax credits. For listed companies, these
changes will need to be factored in quarterly forecasts and earning releases to the stock
markets.
3 Monitor the impact on cash flows – Most of the planning in GST will revolve around
optimizing cash flows. The impact will be as a result of GST on imports, stock transfers and
changes in point of taxation/tax credits.
4 Organisations may need to re-design certain aspects of their Supply Chain – The
concept of mere supply of goods and services trigger tax liability under GST as opposed to sale
under the present VAT, will impact Sourcing, Production and Distribution aspects of the Supply
Chain. For instance, sourcing considerations would involve revisiting sourcing mix (local, inter-
state and imports), stock transfer policy and renegotiation of vendor price due to the GST
impact. From a production perspective, GST impact would vary depending upon the
manufacturing and distribution arrangements e.g. own/ job-work/ contract manufacturing. The
“Place of Supply” rules will determine state where GST is to be deposited.
5 Understand the linkages, differences for companies implementing IFRS – For
companies implementing IFRS, the requirements under IFRS vary with those under
GST. Organizations will need to consider necessary re-alignments within their IT
systems to effectively manage these differences. For instance, there could be possible
differences between GST levy date and date of revenue recognition, accounting for
multiple element arrangements (e.g. the invoice value includes a supply and
maintenance element), accounting for barter transactions, reconciliation of GST on
stock transfers with accounting records etc.
6 Understand the implications on product pricing, marketing and HR – The impact of GST
needs to be considered in the margins of various stakeholders in the distribution chain to ensure
that GST does not negatively impact product pricing and consequently market share. This calls
for a reassessment of exchange, discount and incentive schemes. From a HR perspective,
there may be a need to reconsider the indirect tax management structure, training requirements
of key indirect tax personnel depending upon the impact assessment.
7 Assess if the IT systems are geared to address GST requirements effectively with
minimal manual workarounds – The Audit Committee should at the outset require
management to undertake necessary enhancements to IT systems so that the necessary
systemic alignments are in place to manage GST MIS requirements. Changes in the system are
likely to be required primarily on account of change in taxes/ tax rates,
availability of credits for input taxes on purchases including inter- state purchases and
Import GST, availability of cross credits for goods and services and GST on stock
transfer.
Tax policies play an important role on the economy through their impact on both
efficiency and equity. A good tax system should keep in view issues of income distribution and
at the same time, also Endeavour to generate tax revenues to support government expenditure
on public services and infrastructure development. The ongoing tax reforms on moving to a
goods and services tax would impact the national economy, International trade, firms and the
consumers.
There has been a good deal of criticism as well as appraisal of the proposed Goods and
Services Tax regime.
By the above discussions one can reach following conclusion:
• The macroeconomic impact of GST is significant in terms of growth effects,
price effects, current account effects and the effect on the budget balance.
• In developing open economy with growing service sector, a change in the tax
mix from income to consumption-based taxes is likely to provide a fruitful
source of revenue.
• The proposed structure will simplify the procedure which will end up with equal
opportunity for all the markets and in other hand will leads reduced tax evasion.
It is preferred every economy must adopt GST at national level to make their economy attractive
for foreign investors. By implementing GST, the developing
economy like India can achieve sustainable and balanced development. Slowly,
India shall move to join the world wide standards in taxation, corporate laws and
managerial practices and be among the leaders in these fields.
• It can also be concluded from the above discussion that GST will provide relief
to producers and consumers by providing wide and comprehensive coverage of input tax credit
set-off, service tax set off and subsuming the several taxes. It can be further concluded that
GST have a positive impact on various sectors and industry.Implementation of a comprehensive
GST across goods and services is expected,
ceterisparibus to increase india’s GDP somewhere within arange of 0.9 percentto
1.7 per cent. The corresponding changes in absolute values of GDP over 2008-09 is
expected to be between rs 42,789 crore and rs 83,899 crore, respectively. The comparable
dollar value increment is estimated to be between $9,461 million and$18,550 million,
respectively. The additional gain in GDP, originating from the gstreform, would be earned during
all years in future over and above the growth in gdp which would have been achieved otherwise.
The present value of the gst-reform induced gains in GDP may be computed as the present
value of additional income stream based on some discount rate. We assume a discount rate as
the long-term real rate of interest at about 3 per cent. The present value of total gain in gdp has
been computed as between rs 1,469 thousand crore and 2,881 thousand crore. The
corresponding dollar values are $325 billion and $637 billion. Gains in exports are expected to
vary between 3.2 and 6.3 per cent with corresponding absolute value range as rs 24,669 crore
and rs 48,661 crore. The comparable dollar value increment is estimated to be between $5,427
million and $10,704 million, respectively. Imports are
expected to gain somewhere between 2.4 and 4.7 per cent with corresponding absolute
values ranging between rs 31,173 crore and rs 61,501 crore. The comparable dollar
value increment is estimated to be between $6,871 million and $13,556 million,
respectively.The overall price level would go down. It is expected that the real returns to the
factors of production would go up. Our results show gains in real returns to land ranging
between 0.42 and 0.82 per cent. Wage rate gains vary between 0.68 and 1.33 per cent.
The real returns to capital would gain somewhere between 0.37 and 0.74 per cent. The
efficiency of energy resource use improves in the new equilibrium. The introduction of
gstwould thus be environment friendly. Based on our computations, the revenue neutral
gstrate across goods and services is expected to be positioned somewhere in the range
of 6.2 per cent and 9.4 per cent, depending on various scenarios of sectoral exemptions.
In sum, implementation of a comprehensive gst in india is expected to lead to efficient
allocation of factors of production thus leading to gains in gdp and exports. This would
translate into enhanced economic welfare and returns to the factors of production, viz.
Land, labour and capital. As with any other modelling exercise, the results of our
exercise are subject to certain limitations. The general equilibrium model that we have
used is comparative static in nature. Aggregate supplies of labour, capital, and
agricultural land are assumed to remain fixed so as to abstract from macroeconomic
considerations. Given these limitations the results must not be read as forecasts of
variables but only as indicative directional changes.
Implementation of a comprehensive gst across goods and services is expected, ceteris
Paribus, to increase india’s gdp somewhere within a range of 0.9 per cent to 1.7 per
cent. The corresponding changes in absolute values of gdp over 2008-09 is expected to
be Between’s 42,789 corer and rs 83,899 crore, respectively. The comparable dollar
value Increment is estimated to be between $9,461 million and $18,550 million,
respectively. The additional gain in gdp, originating from the gst reform, would be
earned during all Years in future over and above the growth in gdp which would have
beenachievedOtherwise.The present value of the gst-reform induced gaining maybe computed
as The present value of additional income stream based on some discount rate. We assume a
Discount rate as the long-term real rate of interest at about 3 per cent. The present value of
Total gain in gdp has been computed as between rs 1,469 thousand crore and 2,881 Thousand
crore. The corresponding dollar values are$325 billion and $637 billion. Gains in exports are
expected to vary between 3.2and6.3 per cent with corresponding Absolute value range as rs
24,669 crore and rs 48,661 crore. The comparable dollar value Increment is estimated to be
between $5,427 million and $10,704 million, respectively. Imports are expected to gain
somewhere between 2.4 and 4.7 per cent with corresponding Absolute values ranging between
rs 31,173 crore and rs 61,501 crore. The comparable Dollar value increment is estimated to be
between $6,871 million and $13,556 million, Respectively.

6.3 RECOMMENDATIONS
The following are the suggestion made based on the results of the study.
Some suggestions for better administrative machinery to handle the implementation of
Goods and Services Tax Act in India are:
➢ Standardization of systems and procedures.
➢ Tax relief in case of branch transfer
➢ Well defined procedures in case of Job works
➢ Uniform dispute settlement machinery.
➢ Adequate training for both tax payers and taxen forcers.
➢ Re-organization of administrative machinery for GST implementation.
➢ Building information technology backbone – the single most important initiative for GST
implementation.
➢ Uniform Implementation of GST should be ensured across all states (unlike the
staggered implementation of VAT) as many issues might arise in case of transactions between
states who comply with GST and states who are not complying with GST.

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