• What GST percentage does owners have to pay 12 Percentage OR 5 Percent GST for Property development

My Father gave land for apartment development in February 2017 and registration was done on 16th February 2018. Builder is insisting that we have to pay 12% GST as the registration/supplementary was done prior to April 2019. The project is still ongoing and expected to be complete by the end of the year 2021. When we have spoken to the builder regarding the current GST percentage of 5%, hence we are only liable to pay 5% and not 12% of GST. 
Need help to understand what percentage we as Owners will have to pay 12% or 5%. Builder is currently paying 12% as we understand and I think builder has an option to claim back up to 7% upon completion. 
Why do owner have to pay 12% of GST as we can’t claim back anything. Need your advice as what percentage we will have to pay? We don’t have any plan to sell any apartment asap, but as an when we sell, we have to pay any applicable GST. 
We are forced to sell flats/apartments to pay for GST, your advice is highly appreciated. 
As mentioned registration was done on 16th Feb 2018 on that ground he is insisting to pay 12%.
Asked 9 days ago in GST

If the builder has opted for 12% then you need to pay @12%. You can check from your builder if can pay on RCM basis and thus he can claim input credit. And be can transfer any benefit to you. 

As per applicable provisions till date, While reselling the property, you don't need to pay GST, assuming completion certificate has been received as on that date.

Vidya Jain
CA, Kolkata
933 Answers
37 Consultations

4.8 on 5.0

Dear Sir,


Hope you are doing well !!


For the ongoing projects, builders have been given the option to either continue in 12 per cent Goods and Services Tax (GST) slab with ITC or opt for 5 per cent GST rate without ITC.


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


In your case, the new rate is apply only if builder had opted the option of new rates.


Otherwise, you will be liable to pay GST as per old rates.


We may assist you in entire procedure.


It is advisable to take a phone consultation for detailed discussion.

Payal Chhajed
CA, Mumbai
5039 Answers
137 Consultations

5.0 on 5.0

Due to busy schedule, it is advisable to take phone consultation. The matter needs discussion on multiple issues and 360 degree analysis. 

Vivek Kumar Arora
CA, Delhi
3986 Answers
312 Consultations

5.0 on 5.0

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