GST on properties is levied on the under-construction apartment, flat, and building comprising the godowns, shops, offices, etc. not after issuance of the certificate of completion or first occupation on transfer or sale of the property. In properties that are under construction during construction input tax credit can be claimed on raw materials and services used. If turnover exceeds the prescribed limit they need to get the GST Registration.
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Table Of Content
What is the GST on property?
GST on property is defined as the taxes that are applicable on the sales of the under-construction or property which is newly constructed.
What is affordable housing as per GST on property?
As per GST on property Affordable housing in any metropolitan city is defined as a unit which has a carpet area of 60 sq meters or below or a housing unit that has a price of 45Lakhs. The land is outside the preview of the supply it is nor service neither goods
Coverage under Affordable housing
| Particulars | Conditions |
| Metropolitan Cities |
|
| Non-Metropolitan Cities |
|
What is GST on Real Estate?
As mention below GST on property or Real Estate rates are applicable -
| Description | GST on Property |
| New affordable housing project after 01/04/2019 | 1% |
| Ongoing affordable housing project as on 01/04/2019 | 1% |
| As of 01.04.2023 ongoing projects other than affordable project | 5% |
| As of 01.04.2023 new projects other than an affordable housing project | 5% |
| A project where commercial space is less than the total carpet area | 1% |
When the input tax credit is allowed in GST on property
The few conditions which that need to be fulfilled to claim Input tax credit as mentioned below -
- Under GST claimer is in possession of the tax invoice or debit note issued by the supplier.
- Furnishment of the valid return.
- The tax assessed in relation to such supply has been paid in full to the credit of the relevant government.
- Goods and services are received.
- For personal use those goods and services are used.
Outside the preview of the GST on property
To calculate the value of the GST on flats below 45 Lakhs below mention value are not included -
- Value of the stamp duty payable to the deposit of the maintenance of the apartment, stamp duty payable to the statutory authority, common infrastructure.
- The value of the land will be regarded as accounting for one-third of the entire contract value and will be excluded from GST.
- At Least 80% of the total input service and value of input need to be purchased by the registered supplier.
Conclusion
Gst on property is levied on the under construction property. There is exemption from GST on property which are resale property or fully constructed property for whom completion certificate is received. GST on property for affordable housing property is 1% after deducting land value. On non-affordable residential property gst on property is 5%.
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Frequently Asked Questions
What are the requirements and eligibility for Section 16 of CGST act of the input tax credit?
In section 49 conditions are prescribed the manner or way in which every registered person has the right to claim an input tax credit for any supplies of goods or services or both that are used or intended to be used in the course or advancement of their business, subject to any conditions and restrictions.
What types of input tax credits are eligible and ineligible?
ITC utilised for commercial reasons will be deemed eligible ITC, and those used for other purposes—aside from blocked credit, which is specifically granted separately—will not be eligible to claim as ITC. Whether the same is utilised for taxable or exempt supplies determines whether the ITC is eligible.
What does the CGST Act 2017"s Section 16 2)(D mean?
Under Section 39: The fundamental requirements for claiming an input tax credit are laid out in Section 16(2) of the CGST Act 2017. It states clearly that, in addition to the other requirements, the recipient may only claim credit if the provider has actually paid tax to the government.
What consequences could come from claiming ineligible ITC?
It is clear from the above that if ITC is improperly claimed or used, a penalty is due. Therefore, even if ITC is improperly claimed but not used, a penalty of 10% or 100%, as appropriate, will be assessed.08-Oct-2022.
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