Deepak Gupta | Mar 24, 2019 |
Summary of New GST Rates applicable on Real Estate Sector w.e.f 1st April 2019
GST Council in the 34th meeting held on 19th March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33rd meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house.
This step was taken to boost the real estate sector and make housing more affordable as housing is one of the basic need of the Indian economy.
| Particulars | Applicability | Rate of Tax | Input Tax Credit | Relevant Notification for GST Rate for under construction property |
| On ready-to-move (RTM) properties for which completion certificates are issued | Not applicable Because Sale of building is treated as activity or transaction which shall be treated neither as a supply of good nor a supply of service as per SCHEDULE III of CGST Act,2017 | Not available | SCHEDULE III of CGST Act, 2017 | |
| On Under Construction Properties (For Homes Purchased Under Credit-Linked Subsidy Scheme) | Applicable as supply of services as per Schedule I of CGST Act, 2017 | 12% or 8% as the case maybe. [See Note 2] | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| On Under Construction Properties (For Homes Purchased Under Credit-Linked Subsidy Scheme) | Decision taken in 34th GST council Meeting | 1% | Not available | Official Press Release |
| On Under Construction Properties (Other than above) | Applicable as supply of services as per Schedule I of CGST Act, 2017 | 18% or 12% as the case maybe. [See Note 1] | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| On Under Construction Properties (Other than above) | Decision taken in 34th GST council Meeting | 5% | Not available | Official Press Release |
| On Land purchase and sale | Not applicable. As per Schedule III, sale of land is neither supply of goods nor services. | Not available | SCHEDULE III of CGST Act, 2017 | |
| Works contract | Applicable | 18% | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| Composite supply of works contract | Applicable | 18% | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| Composite supply of works Contract to Government Authorities | Applicable | 12% | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| Composite supply of works contract for use by general public | Applicable | 12% | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
| Composite supply of works contract Affordable Housing | Applicable | 12% | Available | Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 as amended upto 1st January, 2019 |
Note 1 : GST Rate for under construction property is 18%. But in case transfer of land is involved with transfer of property, the value of supply of land is considered as 1/3rd of value of supply. Effective rate of GST is 12% in Such cases.
| GST Rate for under construction property | 18% |
| Less: 1/3 of GST Rate for under construction property when land is transferred along with supply. | 6% |
| Effective GST Rate for under construction property | 12% |
Note 2 : Similarly Effective GST Rate of 8% will be applicable when GST Rate of 12% exists. [Where transfer of land is involved with transfer of property]
| GST Rate for under construction property (For Homes Purchased Under Credit-Linked Subsidy Scheme) | 12% |
| Less: 1/3 of GST Rate for under construction property when land is transferred along with supply. | 4% |
| Effective GST Rate for under construction property | 8% |
Summary of New GST Rates applicable on Real Estate Sector w.e.f 1st April 2019
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
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