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Payment to builder

05 June 2018

our client have brought a flat in april 2016 and some amount is due for payment to the builder. the due payment is rs 5,00,000 lacs. now builder is demanding gst on rs5,00,000. is it needed to pay gst on the due payment. agreement is done in april 16.

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6 Replies

Vinod Babu (24191 Points)
Replied 05 June 2018

GST on completed Flats/Property or ready-to-move-in property

Transfer of completed flats, property or ready-to-move-in property will not involve any service part to the buyer. Hence, GST will not be applicable in such transactions. Because it is neither supply of goods nor service.

Hence, if you are buying a completed flats/property or ready-to-move-in property, then you may save the GST cost.

GST Tax Rate for under construction flats, properties or commercial properties

The applicable GST rate for under construction flats, properties or commercial properties in land or undivided share of land is currently at 12% with full Input Tax Credit (ITC).

The actual GST rate for under construction flats, properties or commercial properties is 18%. However, 1/3 of 18% is deemed as the value of land or undivided share of land supplied to the buyer of the property.

Refer this below image for the clarification given by Central Board of Excise and Customs (CBEC).