Under construction property GST

The rate would depend whether the project started after 1.4.19 or before this date if the project was started before this date then the builder will have an option to choose from 12% rate and 5% rate and if he has chosen 12% rate then he will charge you that but if the construction started after 01.04.19 then he needs to compulsorily charge 5%. It doesnt matter when you have booked the flat it depends on which scheme builder has chosen.

GST will be charged on value charged for constructing your property which is same as agreement value.

What else is included in your agreement value? Are there any amenities?

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Dear Sir,

Hope you are doing well !!   

-As per the decision taken by the GST Council, the developers of residential projects which are incomplete as on March 31, 2019, will have the option either to choose the old structure with ITC or to shift to the new 5% rates, without ITC. Builders will get a one-time option to continue paying tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before April 1, 2019, but which will not be completed by March 31, 2019).

-You can check the same with developers/builders.

- GST will be charged on agreement value.

Hi

The change in rate of tax came in effect from 1.4.19. for all the ongoing projects as on date, the builders were given a one time option to either continue with the old rate or apply new rate. Check with your builder as to what option he has selected.

If he is charging 12%, I assume he is continuing with the old rate. That is completely according to the law.

Hi,

- Agreement value consists of the basic cost of the construction and the additional charges i.e. External electrification charges, IDC, Fire fighting charges, club membership etc. The GST would be charged on the agreement value as the services provided by the builder would constitute composite supply in which construction of the building is the principle supply.

- Reduction in GST rate is applicable for the ongoing project provided the builder has opted for it before the cut off date i.e. 10.05.2019. It is applicable from 01.04.2019. It is totally the call of the builder and not the buyer.

Thanks

Hello,

For the ongoing project as on 1st April 2019, developers were given an option to choose between the old tax rates and the new ones for under-construction residential projects. If your builder has chosen the old rates (i.e. 12% with ITC) that you should check with the builder.

GST will be charged on agreement value.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Hello Sir,

-Yes, builder can charge 12% GST on under construction property.

Further, in terms of ongoing projects, the Council allowed developers to choose between the old rate of 12% and new rates by May 20.

If the builder fails to exercise the option, it will be deemed as though the builder has chosen to charge GST at the concessional rates of tax.

“Ongoing projects” means projects where construction and actual booking started before April 1, 2019, but which was not completed by March 31, 2019.

-GST will be charged on agreement value.

Hi

He might have opted for old rates only,as one time option was given to builder to opt for new rates without ITC or old rates with ITC.

Check with builder for the same.

GST to be charged on agreement value.

Hope it helps