GST on Residential Property - Clarification
GST only on under-construction property and not on ready-to-move-in properties: The CBEC has also clarified the applicable rate of GST on under-construction as well as ready-to-move-in property.
1. In case of purchase of under-construction residential or commercial property, from a builder, involving transfer of interest in land or individual share of land to the buyer, the effective rate of GST for such purchase would be 12%, with full ITC.
2. GST would be levied @18% on 2/3rd of the amount of the property, whereas 1/3rd of the amount was deemed to be value of land or undivided share of land supplied to the buyer.
3. The consideration amount which did not constitute transfer in land or undivided share of land as part of the consideration, for instance, construction services provided by a sub-contractor to a builder, would attract levy of GST @ 18%, with full ITC.
4. Property on which completion certificate has been issued – The clarification states that no GST would be levied on ready-to-move-in or completed property, as per the Paragraph 5(b) of the Third Schedule to the CGST Act, 2017.
5. For Under-construction property – The clarification envisages two circumstances:
Where the entire amount of consideration for the property was paid to the builder of such property before 1.7.2017, no GST would be leviable. This would be even though the construction was completed after 1.7.2017. However, such transaction would attract Service Tax @ 4.5%, considering that as per the Service Tax (Point of Taxation Rules), 2011 where the invoice was raised or payment was made prior to the appointed date under GST, the point of taxation would arise before the appointed day.
Where part amount of the consideration for the property was paid to the builder of such property, before 1.7.2017, Service Tax @ 4.5% would be leviable on the invoices raised or on consideration paid before 1.7.2017. However, any payment made by the property buyer to the builder on or after 1.7.2017 against invoices issued on or after 1.7.2017 would attract GST @ 12%. more
1. In case of purchase of under-construction residential or commercial property, from a builder, involving transfer of interest in land or individual share of land to the buyer, the effective rate of GST for such purchase would be 12%, with full ITC.
2. GST would be levied @18% on 2/3rd of the amount of the property, whereas 1/3rd of the amount was deemed to be value of land or undivided share of land supplied to the buyer.
3. The consideration amount which did not constitute transfer in land or undivided share of land as part of the consideration, for instance, construction services provided by a sub-contractor to a builder, would attract levy of GST @ 18%, with full ITC.
4. Property on which completion certificate has been issued – The clarification states that no GST would be levied on ready-to-move-in or completed property, as per the Paragraph 5(b) of the Third Schedule to the CGST Act, 2017.
5. For Under-construction property – The clarification envisages two circumstances:
Where the entire amount of consideration for the property was paid to the builder of such property before 1.7.2017, no GST would be leviable. This would be even though the construction was completed after 1.7.2017. However, such transaction would attract Service Tax @ 4.5%, considering that as per the Service Tax (Point of Taxation Rules), 2011 where the invoice was raised or payment was made prior to the appointed date under GST, the point of taxation would arise before the appointed day.
Where part amount of the consideration for the property was paid to the builder of such property, before 1.7.2017, Service Tax @ 4.5% would be leviable on the invoices raised or on consideration paid before 1.7.2017. However, any payment made by the property buyer to the builder on or after 1.7.2017 against invoices issued on or after 1.7.2017 would attract GST @ 12%. more
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Under construction flats booked in 2010, which are yet to be delivered, are under GST / Service Tax or exempted as the service tax levied in 2012. more
Dec 19
Mr.Mohit Pande, very much impressed your posts on various subjects. Can I have your email id. Would like to share with you my idea on revenue generation w/o human intervention and universal medicare-cum-insurance with you for your valuable comments/suggestions. Thanks more
Dec 16
refund on IGST clarification and which cader of officer issue refund ? if application allocation state officer state or Centere cader. more
Dec 16
