Concessional GST rate

Same as that from developer. 1% or 5 % depending upon affordable and other than affordable projects.

Where the land is owned by the landowner and the builder constructs and sells residential units under a joint development arrangement, the concessional 1% (affordable residential apartment) or 5% (other residential apartment) rates can generally apply to the builder’s construction service, subject to the conditions in Notification No. 11/2017–Central Tax (Rate), as amended. The fact that the land is not in the builder’s name does not, by itself, disqualify the rate.

The rates are subject to the prescribed input tax credit restriction and apartment-wise conditions, including the applicable carpet-area and consideration tests for the 1% rate. Also distinguish the builder’s sale of units from the landowner’s subsequent sale: a sale after the relevant completion/first-occupation point is generally outside GST, while an under-construction sale may have separate GST implications. The agreement structure, project dates and allocation of units are needed to confirm the treatment.

This classification should be reflected consistently in the project’s agreement, invoicing and GST return records. Manual tracking of landowner-builder allocations and rate conditions is difficult, and automation reduces repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a practical walkthrough of GST workflow automation, connect with us on WhatsApp https://wa.me/message/3HVOZ7HIY4ESC1.

Concessional 1%/5% rate where the land belongs to the customer:

• The 1%/5% rates (without ITC) apply to construction of residential apartments by a promoter in a real estate project (sale before completion). If a contractor builds a house on land owned by the customer (not a promoter selling apartments), it's a works contract, taxed at 18% (or the exempt pure-labour option for single residential units).

• For JDAs, the builder's construction for the landowner's share gets the same 1%/5% rate.