Applicability of GST on sale of under construction residential property by a private limited company who is dealing in buying and selling under construction property and showing as a stock in trade in books . Is GST applicable while selling the under construction unit. Pls elaborate in details . And what's if it will shown as investment in books.
Is GST Applicable? Yes, because the property is sold in the under-construction stage, making it a taxable supply of service rather than a sale of an immovable property.
Applicable Rate: The resale or assignment of rights by a trading company attracts 18% GST (as it does not qualify for the developer’s concessional 5% rate without ITC).
If Shown as Stock-in-Trade: The company is eligible to claim Input Tax Credit (ITC) on the GST paid to the builder because the property is not held "on its own account." This ITC can be used to offset the outward 18% GST liability.
If Shown as an Investment: The company's ITC is strictly blocked under Section 17(5)(d) because it is treated as a capital asset held on its own account. The company will have to pay the outward GST without getting any credit for the inward GST paid to the builder.
Aggarwal Sarawagi and Co
New Delhi
CA
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R P S K & Associates
Nashik
CA Inter
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YOGESH KAPOOR AND ASSOCIATES
New Delhi
B.Com
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