Gst on cess building in Mumbai
This query is : Resolved
23 January 2025
Our cess building is ready for OC
Builder demanding 5% gst now
Area offered as per mhadha 33(7)
Rule ..405 sq feet all tenants received
Are we entitled to pay
Or any award / tribunal contravening
Gst payment by tenants?
Pl answer
Builder demanding 5% gst now
Area offered as per mhadha 33(7)
Rule ..405 sq feet all tenants received
Are we entitled to pay
Or any award / tribunal contravening
Gst payment by tenants?
Pl answer
12 August 2025
Key points:
GST Applicability at 5%:
GST at 5% applies only on the supply of under-construction residential apartments.
Once the OC is issued, further sale or transfer of the property is not subject to GST (it becomes a sale of completed building).
Are tenants required to pay GST on cess building?
Tenants or buyers are liable to pay GST only if the building is under construction and the builder charges GST.
If the building is already completed and OC issued, GST is not payable on sale or lease.
If the builder demands GST after OC, tenants can dispute this demand.
Is there any tribunal/award contradicting GST payment by tenants?
Various rulings confirm GST is not applicable post-OC on residential units.
Tenants can rely on such rulings to challenge GST demand on completed cess buildings.
Your Case:
Since your cess building is ready for OC, GST on further supply is generally not applicable.
Builder demanding 5% GST may not be justified unless it is an under-construction sale.
Area (405 sq.ft.) qualifies as affordable housing, so even during construction 5% GST applies.
If OC issued, tenants should not pay GST on possession or after.
Recommendation:
Confirm the OC date and documentation.
Request builder to justify GST demand post-OC.
If builder insists, tenants can file a complaint with GST authorities or seek legal remedy based on GST laws and tribunal rulings.
GST Applicability at 5%:
GST at 5% applies only on the supply of under-construction residential apartments.
Once the OC is issued, further sale or transfer of the property is not subject to GST (it becomes a sale of completed building).
Are tenants required to pay GST on cess building?
Tenants or buyers are liable to pay GST only if the building is under construction and the builder charges GST.
If the building is already completed and OC issued, GST is not payable on sale or lease.
If the builder demands GST after OC, tenants can dispute this demand.
Is there any tribunal/award contradicting GST payment by tenants?
Various rulings confirm GST is not applicable post-OC on residential units.
Tenants can rely on such rulings to challenge GST demand on completed cess buildings.
Your Case:
Since your cess building is ready for OC, GST on further supply is generally not applicable.
Builder demanding 5% GST may not be justified unless it is an under-construction sale.
Area (405 sq.ft.) qualifies as affordable housing, so even during construction 5% GST applies.
If OC issued, tenants should not pay GST on possession or after.
Recommendation:
Confirm the OC date and documentation.
Request builder to justify GST demand post-OC.
If builder insists, tenants can file a complaint with GST authorities or seek legal remedy based on GST laws and tribunal rulings.
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