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Real Estate Sector under GST

Residential apartments

GST rates for residential apartments are as follows -

(a) 1% (without ITC) for affordable residential apartments

(b) 5% (without ITC) for other residential apartments.

Affordable residential apartment means apartment having;

  • carpet area up to 60 square meter in metropolitan cities or
  • carpet area up to 90 square meter in cities or towns other than metropolitan cities

and for which the gross amount charged by the builder is not more than Rs 45 lakhs.

An ongoing project as of 1st April 2019

In respect of ongoing projects as on 31-3-2019, the promoter has option to shift to new scheme w.e.f. 1-4-2019 (without ITC) or continue under earlier scheme (with ITC), if the promoter intends to shift to new scheme (of 1%/5%) w.e.f. 1-4-2019, he is required to refund excess ITC availed as on 31-3-2019 or get credit of ITC less claimed as on 31-3-2019.

A project is considered as an ongoing project if the following conditions are satisfied:

  • Where Commencement Certificate is required and has been issued by the competent authority on or before 31st March 2019 and the same is certified by a registered architect, chartered engineer or a licensed surveyor that the construction of the project started on or before 31st March 2019.
  • A Commencement Certificate where not required to be issued by the competent authority, then the same shall be issued by a registered architect, chartered engineer or a licensed surveyor that the construction of the project started on or before 31st March 2019.
  • Completion Certificate is not issued on or before 31st March 2019. For instance, if a project has three blocks and completion certificate is received for one block prior to 1st April 2019 and the rest are received after this date. In such a case, the project is considered as an ongoing project because as per Notification issued by Government, a project is considered complete only if the Completion Certificate is issued for the entire project and not a part thereof.
  • The first occupation of the project has not taken place before 31st March 2019. For instance, if an occupation certificate is received only for a part of the premises (up to 31st March 2019) in a huge project and not the entire project, the same is considered as an ongoing project.
  • Apartments are partly or wholly booked on or before 31st March 2019.

 

SAC code for real estate services

 

Group

SAC Code

Service Description

Real estate services involving owned or leased property (Group 99721)

997211

Rental or leasing services involving own or leased residential property

997212

Rental or leasing services involving own or leased non-residential property

997213

Trade services of buildings

997214

Trade services of time-share properties

997215

Trade services of vacant and subdivided land

Real estate services on a fee or commission basis or on contract basis (Group 99722)

997221

Property management services on a fee or commission basis or on contract basis

997222

Building sales on a fee or commission basis or on contract basis

997223

Land sales on a fee or commission basis or on contract basis

997224

Real estate appraisal services on a fee or commission basis or on contract basis

 


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TaxGyata Team

TaxGyata Team