Asked by Anonymous
Hi Guru, recently I received a GST invoice (based on value of supply - GAAP Basics) from a local developer for my commercial shop lot bought. The GST charge is basically arise from certain construction work yet performed at 31st March. The developer advised the percentage of completion (POC) is calculated using the formula below (DG's decision 2/2015):
Actual work done incurred up to 31/3/2015 (I)/Estimated total development costs (ii)
where
(1) Comprises direct building costs which have been certified by the architect and such apportioned common costs e.g. earthworks, piling works, basement/podium carpark etc.) and where the basis of such apportionment is based on the normal industry practices .
(2) Total estimated construction cost for item (i) above
Per the signed SPA clause: " the amount purchaser pay for the charge due to the introduction or amendment of law, shall be such fair and justifiable by the developer's architect". I felt that the GST charge amount is too much as progress billing already reached 3(d) while 3(c) already have architect certificate. The developer quoted the POC is 59% but I would think it should be 76% (3(c)) if fairness is concern. However, the developer refused (reason is P & C) to disclose the latest actual work done incurred up to 31/3/2015 for my unit. FYI, the SPA does not spell out purchaser cannot ask for construction progress and at least I don't think I don't have the right to know the construction work progress of my unit. Please advice how to wisely go on to settle this issue.
Many Thanks.
Su
Actual work done incurred up to 31/3/2015 (I)/Estimated total development costs (ii)
where
(1) Comprises direct building costs which have been certified by the architect and such apportioned common costs e.g. earthworks, piling works, basement/podium carpark etc.) and where the basis of such apportionment is based on the normal industry practices .
(2) Total estimated construction cost for item (i) above
Per the signed SPA clause: " the amount purchaser pay for the charge due to the introduction or amendment of law, shall be such fair and justifiable by the developer's architect". I felt that the GST charge amount is too much as progress billing already reached 3(d) while 3(c) already have architect certificate. The developer quoted the POC is 59% but I would think it should be 76% (3(c)) if fairness is concern. However, the developer refused (reason is P & C) to disclose the latest actual work done incurred up to 31/3/2015 for my unit. FYI, the SPA does not spell out purchaser cannot ask for construction progress and at least I don't think I don't have the right to know the construction work progress of my unit. Please advice how to wisely go on to settle this issue.
Many Thanks.
Su
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