GST on new flat

There is no GST on sale of Immovable property. e.g. Land, Building etc.

However, Sale of under constructed property is treated as supply of services under Schedule II read with Section 7 of CGST Act, 2017.

Hence GST is charged on under constructed property.

Here, those who have done prior booking have to pay 49.3 lakhs and those who booked after completion need to pay only 44 lakhs for the same apartment...

Unfortunately Yes!!!

Can't understand the logic behind that...

As per Para 5 of SCHEDULE III of the CGST Act 2017, Sale of Land and subject to clause (b) of Para 5 of the CGST Act 2017 , Sale of Building is neither treated as Supply of Goods or Supply of Services.

So if the Flat is purchased after receiving the Completion Certificate, then the builder cannot collect GST from the customer since it is not a SUPPLY.

Hence Property booked at the construction stage would attract GST.

When we book the apartment, it is almost in completion and only 10percent is left..so is the GST applicable only on the remaining 10%?is there any clause in relation to it?

Dear Anj

Let understand with example : .
Suppose Builder PDR & Co. construct the Flats & have 2 buyer Mr.P & Mr.R.

Cost of Construction Per Flats :
Purchase of Goods & Services = 100
GST (Paid by Builder ). = 12
Total Cost of Flats. = 112

Now Buyer Mr. P Books the Flat During the construction Period .
Now lets Assume Builder Keep 30% profit On his construction of Per Flats ., the Selling Price come to 130/- (30% of 100)

Now calculation of Builder in regard to sale made to Mr. P will be :

Rs. . 130
GST . . 16
Total. 146 (Cost to Mr P)
(In this Case the builder can Adust his input Tax of Rs.12 against Output Tax of 16 .
Builder Profit 26 (100-130-(4))


Now calculation of Builder in regard to sale made to Mr. R will be After completion Certificate :

Rs 130
Add;:. 12 *(Require to Rev. ITC & Deposit)

Total 142(Cost To R)

Builder Earn = 30 (112-142)

So in above Example you are "Mr. P"
& in case of Mr. R , the builder has cushion of Rs 4 additional Margin which he is adjusting.

Thank you sir, it was a great explanation...
In my case builder is selling to Mr. R for Rs 130 itself... it's a huge difference for us... anyway that's builder's choice...

You are always welcome dear