GST not applicable to house property with completion certification, says Finmin
10 Dec 2018
1
The government has clarified that there is GST is not payable on sale of complex/ building and ready to move-in flats where sale takes place after issue of completion certificate by the competent authority.
GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale, a finance ministry release pointed out.
The clarification follows instances of builders charging GST on buyers of constructed property irrespective of the project having received completion certificate and is ready for occupation and that the builders can avail of the input tax credit for payment of tax.
Housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of state government etc attract GST of 8 per cent. For such projects, after offsetting input tax credit, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST, the finance ministry release pointed out.
Even for projects other than affordable segment, the release said, it is expected that the cost of the complex/ buildings/ flats would not have gone up due to implementation of GST.
On the other hand, builders are required to pass on the benefits of lower tax burden to the buyers of property by way of reduced prices/ instalments, where effective tax rate has been down, the release added.
.jpg "RBI keeps repo rate unchanged as focus remains on inflation")
.jpg "Indian Oil, Panasonic team up for lithium-ion cell production in India")
