GST on Additional charges payable to builders

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This discussion clarifies the Goods and Services Tax (GST) applicable to various additional charges levied by builders. The key factor determining the GST rate is whether these charges are included in the property's stamp duty. If they are part of the stamp duty, they are considered incidental to the construction service and taxed at the same rate as the property. If not included in stamp duty, they are treated as separate supplies, typically attracting an 18% GST.

Rameshkumar Jain

Rameshkumar Jain (Querist)
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07 June 2025 Please help with the GST rates for the following charges which needs to be paid to the bulider.
1. Electric connection/Water charges.
2. Club house charges.
3. Share money application charges.
4. Society formation charges.
5. Legal expenses.
6. Apex body charges.
7. Advance adhoc maintenanace charges.
8. Infrastructure/development charges.
9. Pipeline gas connection charges.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 June 2025
1. If the aforesaid charges (collectively or individually) become part of stamp duty of the property, we can safely argue that the said charges are in relation to or incidental to supply of construction services and therefore, will form a part of composite supply of property. Accordingly, GST shall be leviable at the same rate as leviable on principal services, i.e., supply of property.
2. However, if the said charges are not included in the computation of stamp duty charges, it will be considered as individual independent supply and it will be difficult to argue the same as composite supply of property and accordingly, GST @ 18% shall be leviable.

Rameshkumar Jain

Rameshkumar Jain (Querist)
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10 June 2025 Thanks for your reply Seetaramanji.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2025 You are welcome...
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