Real Estate Sector plays a very important role in the development of an economy. Concerns were raised by builders/developers regarding high GST rates on the properties. The Government has granted relief to some extent by reducing the GST rates on real estate projects. The builders, developers and others can avail the benefit of the reduced rates as per revised scheme applicable w.e.f. April 1, 2019. we are the best income tax return and gst return filing consultants in bangalore, chennai & delhi.
1. The new scheme is compulsory for projects commenced on or after 1-4-2019.
2. The revised scheme applies to residential apartments in Real Estate Project (REP) and Residential Real Estate Project (RREP) and commercial apartments in RREP which are covered under RERA [Real Estate (Regulation and Development) Act, 2016].
3. GST Rates under New Scheme:-
Description of Services
GST Rate (effective)
Residential Apartments
Affordable Residential Apartments
1%(without ITC)
Other Residential Apartments
5%(without ITC)
Commercial Apartments
RREP
5%(without ITC)
Other than RREP
12% (with ITC)
4. These rates apply where the supply of services involves transfer of land or undivided share of land and its charges are included in the amount charged to customer.
5. In respect of new projects, the tax (CGST, SGST/UTGST or IGST as applicable) shall be paid in cash by debiting the electronic cash ledger only [No Input Tax Credit allowed].
6. If landowner - promoter transfers development right or FSI (including additional FSI) to a promoter (developer- promoter) against consideration, wholly or partly, in the form of construction of apartments, the developer- promoter shall pay tax on supply of construction of apartments to the landowner-promoter. The landowner – promoter can take credit of taxes charged from him by the developer promoter, if the landowner-promoter further supplies such apartments to his buyers.
7. No GST is payable where the entire consideration has been received after issuance of the completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.
8. All cement for the project must be purchased from a registered supplier only. If not so received, the promoter is required to pay GST @ 28% under reverse charge by the promoter (even if total value of supplies received from unregistered suppliers is less than 80%).
9. In case of capital goods procured from unregistered person, the promoter is liable to pay GST at its respective rate under reverse charge.
10. All accounts are to be maintained project-wise. If project is big, it is advisable to have separate GST registration for each project.
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