GST calculation for under construction apartments


Any body can guide me how to calculate the GST for under construction apartment, which has 80% construction completed before GST implementation.


Hi Aswani,

Here is how GST is applied under different situations.

When You Have Bought a Property After The Completion Certificate Was Issued To The Builder
In such a situation, GST will not be applicable as it is considered a ready-to-move-in property and there is no transfer or supply of goods and services.

Payment Made To The Builder In Part Or In Full Before The Roll Out Of GST Regime
Whether you paid in part or in full, if the payment is made before the rollout of GST regime, then it will not invite any GST tax. However, keep in mind that you will be charged applicable service tax rate of 4.5 percent.

GST On Under-construction Flats, Properties Or Commercial Properties
In this category, the actual GST rate is 18 percent. But one-third of this 18 percent is deemed as the value of land or undivided share of land supplied to the buyer of the property. Hence, GST rate lowers down to 12 percent on under-construction flats, properties or commercial properties with full input tax credit.

GST On Houses Purchased Under CLSS
The Credit-Linked Subsidy Scheme (CLSS) is meant to provide affordable houses to the lower and weaker sections of the society. The GST rates on such houses will be effectively 8 percent and not 12 percent as one-third will be deduction towards the cost of the land.

For an under-construction property GST is not charged on the entire value of the property. It is charged only on two-third of the value. One-third value of the property is considered as the cost of land.

Looking for a Home Loan? Click here.

BB Expert