Gst apply or not

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BHARTI R CHUADHARI (Querist)
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17 February 2024 hi
booking in old building flat, but CC is not coming then Gst is applicable OR NOT
if applicable then what is rate of Gst
because building is YEAR 2000

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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07 July 2024 In the context of GST, the applicability of tax on the sale of a flat depends on whether the property is considered a "construction service" or a "ready-to-move-in" property. Here's how GST is applicable:

### GST on Under-Construction Property

1. **Under-Construction Property**: GST is applicable on the sale of under-construction properties. An under-construction property is one where the builder has not received the completion certificate (CC) at the time of sale.
2. **GST Rate**: The GST rate on under-construction property is 5% without the benefit of Input Tax Credit (ITC) for residential properties. For affordable housing, the rate is 1% without ITC.

### GST on Ready-to-Move-In Property

1. **Ready-to-Move-In Property**: If the completion certificate (CC) has been issued, the property is considered a ready-to-move-in property, and the sale of such a property is treated as the sale of immovable property, which is outside the purview of GST.
2. **No GST**: No GST is applicable on the sale of ready-to-move-in properties, i.e., properties where the CC has been received before the sale.

### Specific Scenario: Booking in Old Building Flat (Year 2000) without CC

If you are booking a flat in an old building from the year 2000 and the completion certificate (CC) has not been issued, the following points are relevant:

1. **Lack of CC**: Since the CC is not available, the property is technically considered under construction, and hence GST is applicable.
2. **GST Applicability**: GST will be applicable on the sale of the flat as it falls under the category of an under-construction property.
3. **GST Rate**: The applicable GST rate is 5% without ITC for residential properties.

### Conclusion

For a booking in an old building flat (from the year 2000) without a completion certificate (CC), GST is applicable at the rate of 5% without ITC for residential properties. If the flat were considered ready-to-move-in (i.e., with a CC), no GST would be applicable.

### Practical Steps

1. **Verify CC Status**: Confirm the status of the completion certificate (CC) with the builder or developer.
2. **Documentation**: Ensure all documents related to the booking and the property’s status are in order to determine the correct GST liability.
3. **Consultation**: It may be prudent to consult with a tax advisor or GST expert to ensure compliance and understand the exact tax implications based on the specifics of your situation.

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