APPLICABILITY AND BREAKDOWN OF GST COMPLIANCE ON SPLIT PAYMENTS MADE TO LANDOWNER AND LEVELOPER

• Amount received AFTER Completion: No GST applies (Falls under Schedule III).

• Amount received BEFORE Completion: GST applies on the developer's share (Treated as a supply of construction services under Schedule II).

A key point many homebuyers miss: GST on a property purchase depends on whether the payment was made before or after the Completion Certificate (CC).

If the ₹49 lakh developer portion was paid after the CC issued on March 25, 2026, GST generally does not apply to that portion.

But if any amount was paid before March 25, 2026, GST may apply to those pre-CC payments. The applicable rate can be 1% for qualifying affordable housing or 5% for other residential units.

So the most important question is: Were any payments made to the developer before March 25, 2026? That determines the GST exposure.

GST treatment depends on whether Mr. C’s supply is a construction service for an under-construction property or a transfer of a completed building. The fact that the municipal corporation regularised the construction on 25/03/2026 does not, by itself, establish that a completion certificate was issued.

• Under Schedule III to the CGST Act, sale of a building is outside GST only where the entire consideration is received after the completion certificate is issued by the competent authority—or after first occupation, whichever is earlier. If the 25/03/2026 order is the relevant completion certificate (or first occupation occurred earlier), the ₹49 lakh attributable to the completed building would generally not attract GST if received afterwards.
• If any consideration for Mr. C’s construction service was received before that date/first occupation, GST may apply to the construction-service portion, subject to the transaction’s contractual and invoicing facts. The ₹21 lakh land component is not, by itself, consideration for Mr. C’s construction service.
• Please verify the nature and effect of the municipal order, the date of first occupation, and when the ₹49 lakh became due/was paid. The agreement date alone does not establish when consideration was received.

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