GST on buying under construction builder floor

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When purchasing an under-construction builder floor in Delhi, buyers typically face a GST rate of either 1% for affordable housing or 5% for non-affordable housing. Crucially, for non-affordable housing, builders cannot claim Input Tax Credit (ITC). While a general SAC code for residential construction services might suggest 18% GST, the specific rates for property purchases are usually capped at 5% or 1% as mentioned.

Ashish Agarwal

Ashish Agarwal (Querist)

04 May 2023 I am in the process of buying a under construction builder floor in Delhi. The builder is saying we have to pay 18% GST. Is the rate 18% ? Plus he is saying that builders can't claim any ITC under the GST act ? Is this true ? Please provide your insight. Thank you

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 May 2023 In India, buyers of under-construction flats, apartments, and bungalows pay 1% GST for affordable housing and 5% GST (No ITC) for non-affordable housing.

Ashish Agarwal

Ashish Agarwal (Querist)

04 May 2023 Thank you sir.
I just saw that for the SAC code 995411 with description : Construction services of single dwelling or multi dwelling or multi-storied residential building, , the GST rate is 18%.
My question is - won't this code be applicable in my builder's case ? If yes, then isn't the builder correct OR will it be 5% only as you had mentioned (non-affordable) ?

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