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what is the Gst rate for under construction property

21 August 2019

I am buying a 1bhk flat in pune and it's possession is within 3-4 month. it's value is around 32 lakh and builder is charging GST @ 5.5% so I want to know whether he is charging GST rate is correct or not if not then what's the actual GST rate for under construction property.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (180010 Points)
Replied 21 August 2019

The developers of residential projects which were incomplete as on March 31, 2019, had the option either to choose the old structure with ITC or to shift to the new 5% and 1% rates, without ITC.

Builders got a one-time option to continue paying tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking had started before April 1, 2019, but which were not be completed by March 31, 2019)

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Shivam RC (Student) (23683 Points)
Replied 21 August 2019

OLD GST RATES on Under-Constuction Properties :

1). AFFORDABLE Housing Segment : 8% with the benefit of ITC.

2). OTHER than Affordable Housing Segment : 12% with the benefit of ITC.

NEW GST RATES applicable w.e.f 01.04.2019 :

1). AFFORDABLE HOUSING SEGMENT : 1% GST without the benefit of ITC.

2). OTHER than Affordable Housing Segment : 5% without the benefit of ITC.

However, the Government of India gave a ONE TIME OPTION to choose between OLD GST RATES and NEW GST RATES to the Builders of Project which were not completed within 31.03.2019.

So ask your Builder that whether he has opted for New GST Rates or continuing with the OLD GST Rates. Then act accordingly.

Best Wishes.

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