What is gst on property? - real estate transactions

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	Gross Amount is not more than 45 lakhs Carpet Area is up to 60 sqm of the flat or residential house
Non-Metropolitan Cities	Gross Amount is not more than 45 lakhs Carpet Area is up to 90 sqm of the flat or residential house

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 is an e-Way Bill under GST transaction?

An e-Way Bill under GST is an electronically generated document required for the movement of goods above the prescribed value limit, ensuring transparency and compliance during inter-state and intra-state GST transactions.