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GST officers across India have launched a campaign to focus on the books, returns, and data of real estate transactions, especially related to sale or purchase of flats. Reason To check whether the correct GST rates were applied on sale of flats. In many cases, tax demands are also have be
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GST officers are auditing flat sales to verify that the correct GST rates have been applied and to address cases where GST may have been undercharged.
Real estate projects are classified as Residential Real Estate Projects (RREP) if commercial units occupy 15% or less of the total carpet area, and as Real Estate Projects (REP) if commercial units exceed 15%.
The notified GST rate for RREPs is 1.5%, which becomes an effective rate of 1% after the standard one-third deduction for land.
The notified GST rate for REPs (commercial projects) is 7.5%, which becomes an effective rate of 5% after the standard one-third deduction for land.
No, the 1% and 5% are effective GST rates after a standard one-third deduction for land, which is not subject to GST. The notified rates are 1.5% and 7.5% respectively.
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