That is the impressively fancy title of a comedy by William Shakespeare. The intended message, as claimed, is that deceit is not inherently evil, but something that can be used as a means to good or bad ends. There are many examples of deception and self-deception.

Leaving it open to be deciphered by anyone who is intent upon and desires to independently ponder and find a justification for choosing the title for the subject matter of discussion herein, to move forward, with a change in course correction, sans any further ado, the  discussion herein is about the GST regime.

1.Among others, the most common concern has been the levy of  GST on a simple transaction of sale and purchase of ‘UNITS’ entered into between a promoter- seller and home buyers- from whom the former, as the collecting agent collects the tax amount for paying over to the government. Experts in field practice have off and on spoken of,  and vociferously given vent to the problems immensely faced with in regard to the two overriding areas of most concern, from the viewpoint of the Buyers , as a community  : –

a) Input Tax Credit (‘ITC’); and

b) The new rates of 1 % and 5 % (with no ITC) prescribed for ‘realty’ transactions.

That has to be, as per the law, compulsorily adopted for all new projects after the prescribed date. However, in relation to ‘ongoing projects’, option of adopting the old rate of 12% (with ITC) had been left to the realtor. To be precise, having prescribed a cut-off date (i.e. the effective date for the new rate to apply) it was left to the option of realtor to nonetheless adopt the old rate, but  subject to meeting  certain conditions.

2. Going by the later developments, it has come to be realised that the option so given has lead to/ resulted in controversies and disputes, galore, – otherwise avoidable- because of the concept of ITC, admittedly with inherent complicity/ practical problems, that is required to be factored in, in applying the old rate; so also, in applying the new rate only to new projects.

To explain and illustrate one such type of developments, consider the Orders passed by the regulatory authorities (APA AND APAA- to curb/ keep under control the traditional mentality, subsisting as a common practice, of a business man making unduly excessive profits – that is, more than what are legitimate and justifiable in the eyes of the governing law (s) (with added Rules and Regulations).

Case Study

3. The Order of the NAPA lately reported is that posted @Builder denies ITC benefit to FLAT buyers, Guilty of Profiteering: NAA

The Order has been handed down in favour of homebuyers.

It is common knowledge that several builders have not, fraudulently, been passing on the benefit of tax credit on inputs such as cement, steel, paints and sanitary-ware, etc., etc. Albeit as per the indisputably clear legal position, if the old rate of 12%   is charged, that could only be subject to the adjustment and deduction of ‘ITC’.

The often raised, patently frivolous plea of promoter – seller that such adjustment   will be done and the buyer will or could be allowed only on completion of the project, or at the time of giving possession has been simply taken on record and made a mention of in the Orders, but with the same breath only to be rejected in almost every such case settled by the APA/APAA.

What calls for a special noting is that, according to the enacted scheme of things, promoter- seller has to issue two invoices- one for the price (instalment) and another for the GST thereon (the tax invoice). And, the tax invoice so issued must be for the amount collectible net of ITC (not gross).

Another aspect to be taken a conscious note of is that in those cases, after a thorough and detailed investigation, on the basis of the Data collected and correlated, the builders have been found to be guilty of not passing on the entire ITC benefit. For instance, in the recently reported case of Mahindra, the builder has been held to have been benefited “from the additional ITC to the tune of 7.05% (7.06% – 0.00%) of the total turnover which he was required to pass on to the flat buyers of this Project.”

The APA has passed its Order accordingly, on the basis of the Data – as made available, admitted, and accepted; apart from levying a penalty, also directed the promoter-seller to pass on the ITC benefit to home buyers, with interest.

As read and understood, – out of the tax collected from home buyers @12%, a refund of 7.05 % has been ordered to be made. In essence, the rightly chargeable rate has been held to be 4.95 %.That is, less than the new rate of 5 % which, but for the dispute, would otherwise have been charged.


In reference to another such report of the APA’s Order, given publicity in print media, an Expert (name withheld for sake of professional ethics) is mentioned to have said:

“Such rulings should help homebuyer’s understand that under GST looking at only the rate charged by developer does not give the complete and clear picture. What is equally important is the benefit accrued to the developer on account of reduction in the taxes paid by him on his purchases. One needs to look at both the GST rate and the input tax credit to understand the overall impact on the price.”

However much tried, personally,  one has not been able to make out what really the message the expert intended to convey, and also, has actually conveyed, in order to, as professed,  ‘help’ homebuyers to better understand what is what.

Be that as it may, in all cases in which the APA / APAA has passed Orders directing refund of excess GST collected without factoring in the ‘ITC’ availed of or are entitled or expected to have availed of, the excess profit unduly made by builders is noted to have been in the range of 5 % to 7 %. That is, the GST leviable, and therefore, collectible from buyers net of ITC benefit seems to work out to not more than a maximum of 7% to a minimum of 5%.


It is thus left to be gathered, in hind sight, that the GST  regulatory authorities have, presumably,  proceeded on the premise that those are all cases in which , the builder has either exercised, within the prescribed time limit ,  the one-time option given or failed hence must be taken to have chosen not to exercise the option. In either situation, the rate of levy could only be the fixed standard rate of 5%, without ITC – not the old rate of 12%.

Going by one’s own honest guess, however, in a given case, granting that all the relevant information, as commonly expected of, must be available on the GST portal, it should not but be quite easy to readily ascertain whether or not the promoter has or has not exercised the option within the prescribed time, and accordingly, which of the two rates should apply.

By any thinking, even in a case in which the rate of 5% is unequivocally / indisputably applicable, but the builder has, on own whims, with no rhyme Or reason, collected GST in excess by adopting any of the dubious gimmicks by exploiting the loopholes in the machinery in place, then also the APA/APAA might have to be presumed to, in exercise of his powers- specifically vested or implied, settled the dispute in customer (buyer)’s favour.

So far as is personally known, however,  the aspect focussed on as above, does not seem to have been at all addressed or kept in focus; hence not been gone into in any of the thus far reported proceedings before the APA/APAA.

For some of the similarly unexplored areas – (e.g. the cases in which RCM becomes applicable)  – left to be accorded an insight, inadvertently or otherwise, attention is invited to own thoughts  and viewpoints shared through/ wrt the related several  Posts on this website itself, for instance, –

@ 60 Disclosures to be made in GST Audit Report

For More, Search –


Also, look through the several related posts on Facebook and Linkedin; besides elsewhere, on the Google blogs @  swami look blogs on gst and itc


All along, and thus far, it has remained a mystery or hidden fact as to why at all the GST Council recommended and the Government accepted the levy of 12 % (with ITC) and not 5% (without ITC), uniformly, across the board.

What does not appeal to common sense is, why the hair – splitting and brain- teasing exercise , – with readily foreseeable  impediments and insurmountable problems galore in implementation and enforcement on one hand and compliance on the other,-  came to be preferred, instead of the simple and straight forward fixed rate of 5% !

May be, had that been done so, the buyers (or the prospective buyers), in the ‘ongoing projects’, as a class (that is, as on the cut-off date) would have been saved from any further ado; and the matter would have reached a conclusion, with no further disputes and litigation.

Even as of now, it may not be too late for the GST Council and the Government(s) to prudently think of and decide upon a course correction, to the end of having the present law suitably amended/ modified, retro- actively;  thereby make it workable with no hassle /impediments whatsoever, for both the Revenue and the taxpayers.   

OVER to the GST law pundits active in field practice, with an open invite to share independent views on, and /or add value to, if any, the line of cogent reasoning highlighted herein above, profoundly for THE COMMON GOOD.

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December 2023