Is GST applicable in my case , Please guide.

Hi Pradeep,

Your situation involves a property booked before GST implementation, with payments made both before and after GST came into effect. Here’s a detailed explanation based on GST rules related to under-construction properties:

GST Applicability on Under-Construction Flats

1. GST on Under-Construction Property:
   GST is applicable on the sale of under-construction flats (i.e., before completion and registration of the property). The rate for affordable housing or non-affordable housing can vary, but usually, it's around 5% (without ITC) or 12% (with ITC) depending on the category.

2. Effective Date of GST:

   • GST was introduced on 1st July 2017.

   • For properties booked before 1st July 2017, but construction and payment continues after that date, GST is applicable only on the payments received after 1st July 2017.

   • Payments received before 1st July 2017 are not subject to GST.

3. Your Case:

   • You booked the flat in 2016 and signed the agreement in December 2017.

   • Since your agreement was signed after 1st July 2017, GST will apply on payments received after the agreement date.

   • If the builder collected advances before GST rollout, GST would not apply on those, but payments demanded after 1st July 2017 are subject to GST.

   • The builder cannot charge GST on the entire sale consideration if payments were made before GST came into effect.

   • The rate is generally 5% for residential properties without ITC (assuming it is non-affordable housing), or 12% if ITC is claimed by the builder.

4. Receipts Mentioning “Inclusive GST” Before GST Implementation:

   • These might be inaccurate or misunderstandings; GST was not applicable before July 2017.

   • It’s possible the builder had included some other tax or charges mistakenly described as GST, or this is a simple receipt format without exact tax applicability.

What You Can Do:

• Ask the builder to break down the GST charges only on payments made after 1st July 2017.

• Check the exact rate applicable as per the RERA classification of your project (affordable or non-affordable).

• Confirm if builder has claimed Input Tax Credit (ITC); this impacts GST rate.

• If the builder insists on charging GST on the entire amount, you can escalate the matter to the GST authorities or seek legal advice.

Summary: