My family purchased a commercial property 2 years ago before GST (Goods and Services Tax) implementation on 1st April 2015.
The property was bought under a bank loan and by March 2015, 80% of the property was completed. The final 20% of the payment would only be billed after 1st April implementation of GST.
Out of the blue the sales person from the developer office called us to pay up the remaining 20% to avoid GST charges. The sales person mentioned that if we pay up before April we we will save on paying GST, she mentioned that the developer will even get the Architect to sign off as project completed. As it was a bank loan I asked how can we pay when the bank will be releasing the money, which will result in double billing and the salesperson replied that they will rebate the sum back to us.
When we pressed further for black and white on this item, the sales person refused to provide and therefore we didn't cooperate on it. In theory we could have saved on GST but nowadays with the Internet and computers, someone can easily whistleblow on this to the tax department. It is basically trying to defraud the taxman.
Recently it was mentioned in a Chinese daily that if commercial property Sales and Purchase (S&P) agreement does not contain a clause on GST then it cannot impose additional charges for all progressive billings charged after April 2015. Basically it is saying you can't simply add 6% to the existing progressive billing if the Sales and Purchase agreement does not have a special provision to charge the buying GST.
Basically what happened was that someone overlooked this and there was no clause about imposing additional charges for GST. Obviously the developer has to be a GST registered entity and commercial properties are GST goods therefore the GST still has to be collected but the developer has to absorb it from the existing price.
Last I called the sales office, the sale person resigned.