GST Rate Applicable On Payments Made To The Builder

Can the builder charge 12% GST for payments received up to 31.03.2019 & then 5% for payments received after 01.04.2019? Can a buyer insist on proof of payment of GST?

Answer (1)

Arshi Noor

Arshi Noor

  • Sector-1, Noida

At the 33rd GST Council Meeting held on 24th February 2019, new GST rates have been introduced for residential real estate which will come into effect from the 1st of April 2019. The new GST rates on residential real estate transactions have been proposed as follows: GST to be charged at 5% without Input Tax Credit (ITC) on residential properties that are not part of the affordable housing segment. GST to be charged at 1% without ITC on residential properties that are included in the affordable housing segment. Read More: Get complete details of the 33rd GST Council Meeting Proposals GST on real estate in case of under construction properties is 12%. GST does not apply to sale of completed properties (where completion certificate has been issued) or to the resale of old properties. Builders receive input tax credit on the materials purchased from suppliers/contractors and under the current GST structure, were expected to pass it on to home buyers. However this has not happened so far. As a result there may be changes in the GST regime with respect to real estate in the future. Real Estate has historically been a preferred investment choice for many Indians and the sector has been driven to a large extent through investments made in the residential property segment. A joint report from JLL and CREDAI (Confederation of Real Estate Developers’ Associations of India) has estimated that housing sector investments in India since 2014 amounted to Rs. 59,000 crore and accounted for approximately 47% of the total investments in the sector with projections indicating further increase in the coming years.Yes you can ask for proof of payment.

Answered on 01 Nov 2019


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