12/16/2017 GST on Under Construction and Ready-to-move-in Property

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GST on Under Construction and Ready-to-move-in

Property-Clarification
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GST on Under Construction
and Ready-to-move-in Property. GST is payable only
on under construction property

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Clarification about applicability of GST on Under Construction and Ready-to-move-in 1 2 3

JUDGMENTS » IRDAI OTHERS »
Property 4 5 6 7 8 9 10

As per GST law, construction of a complex, building, civil structure or a part thereof, including a complex or 11 12 13 14 15 16 17

building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received 18 19 20 21 22 23 24
after issuance of completion certificate, where required, by the competent authority or after its first 25 26 27 28 29 30 31
occupation,whichever is earlier,is a supply of service and liable to GST.

1. Sale of building is an activity or consideration which is neither a supply of goods nor a

supply of services (Para 5 of schedule III of the CGST Act, 2017).
ABCAUS
@abcaus
2. It flows from the above facts that, sale of ready-to-move-in or completed property does
not attract GST. GST is payable only on under construction property as discussed below. The Govt./Bureaucracy is considering CAs as
Government Servant and not independent
Property Under Construction Property professionals with roles limited to facilitating
Laws only. Read more at goo.gl/uEk8ag
for which
11:46 PM - Dec 7, 2017
completion Entire consideration has been paid to the builder Part consideration has
certificate 0% I Somewhat Agree
before 1st July, 2017 been paid to the builder
has been before 1st July, 2017 100% I don't think so
issued
0% Can't Say

No GST is There is no GST payable on such property even if 4.5% of Service Tax is
2 votes • Final results
applicable the construction is completed after 1st July, 2017. applicable on the invoices
on ready- This transaction will attract Service Tax at the rate of raised or consideration paid
1 1
to-move-in 4.5% because as for the Point of Taxation Rules, before the 1st July, 2017.
or 2011 applicable to Service Tax, where the invoice However, payment, made by
completed was raised or payment made prior to the appointed the buyer to the builder on or
property as date under GST, the point of taxation arose before after 1st July, 2017 against
per para the appointed day and thus such transaction attracts invoices issued on or after
5(b) of Service Tax and not GST 1st July, 2017 shall attract
Schedule II GST@12%.

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12/16/2017 GST on Under Construction and Ready-to-move-in Property
of CGST
Act, 2017

RATE OF GST

Effective rate of GST payable on purchase of under construction residence or commercial properties from a
builder involving transfer of interest in land or individual share of land to the buyer, is 12% with full Input Tax
Credit (ITC). [GST payable@ 18% on 2/3rd of the amount for the property; 1/3rd of the amount having been
deemed as value of land or undivided share of land supplied to the buyer.]

Consideration which doesn’t constitute transfer in land or undivided share of land as part of consideration,
such as construction services provided by a sub- contractor to the builder, attracts GST at the standard rate of
18% with full ITC

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