Buying A Property? Know The GST Rates First
1.1 Real estate sector will invite GST at the rate of 12 per cent with full input tax credit. According to the schedule of GST rates for services, as approved by the council, real estate sector will comprise “construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. The value of land is included in the amount charged from the service recipient.” These will be charged @ 12 per cent with full input tax credit. In other words, it means all under-construction properties will invite a GST of 12 percent.
1.2 GST On Under-construction Flats, Properties Or Commercial Properties: In this category, the actual GST rate is 18 percent. But one-third of this 18 percent is deemed as the value of land or undivided share of land supplied to the buyer of the property. Hence, GST rate lowers down to 12 percent on under-construction flats, properties or commercial properties with full input tax credit.
2.0 GST will not be applicable for ready-to-move-in properties.
3.0 There are various stages for under-construction properties and GST will be dependent on it.
3.1 When You Have Bought a Property After The Completion Certificate Was Issued To The Builder. In such a situation, GST will not be applicable as it is considered a ready-to-move-in property and there is no transfer or supply of goods and services.
3.2 Payment Made To The Builder In Part Or In Full Before The Roll Out Of GST Regime
Whether you paid in part or in full, if the payment is made before the rollout of GST regime, then it will not invite any GST tax. However, keep in mind that you will be charged applicable service tax rate of 4.5 percent.
4.0 GST On Resale Properties Or Flats
As they are considered ready-to-move-in properties, they will not invite GST taxation.
5.0 GST On Houses Purchased Under CLSS
The Credit-Linked Subsidy Scheme (CLSS) is meant to provide affordable houses to the lower and weaker sections of the society. The GST rates on such houses will be effectively 8 percent and not 12 percent as one-third will be deduction towards the cost of the land. more