The Realty contractors have approached the Bombay High Court challenging the discrepancy in GST rates for Contractors and Sub-contractors.
Currently, 18 per cent tax is charged on under-construction properties under the GST regime. The petitioners alleged that the Government has allowed deduction of land value by the developer, making his effective tax rate 12 per cent. However, the sub-contractors have to pay 18 per cent as tax.
The contractors alleged that since the difference in rate cannot be passed on to the developer and thereby to the end-consumer. Subcontractors now want the additional 6% GST they pay to be reimbursed.
The petitioners want the Government and GST Council to fix the anomaly and bring parity in GST rates charged from contractors and subcontractors, or provides a mechanism to make good their losses.
If there is an anti-profiteering mechanism to ensure tax benefits are passed on to consumers, then why not the opposite, they ask.
