Real Estate sector is a pillar of Indian economy. GST, also known as Goods and Service Tax, includes Central GST, State GST and Integrated GST. Previously, there were various modes of taxes like VAT, Sales tax, etc. levied on the properties. However, now the Government has decided to fix a single rate GST on properties. We buy and invest in properties; however we are still unaware of GST on real estate sector.
The buyer and the investor who invests in under-construction properties pay the GST. According to the old tax regime, the GST council used to charge 12% on under-construction properties. No taxes are levied on completed or ready-to-sale properties with completion certificates.
The new tax policy is effective for projects from April 1st, 2019 onwards. GST for affordable residential units is 1% without ITC. Also, GST is 5% for any other non-affordable residential or commercial and under-construction property without Input Tax Credit(ITC). If the promoters, landowners, investors, or buyers want to avail Input Tax Credit then they would have to pay 12%. In case of ongoing projects, the promoter has to choose between the two tax regimes. To avail the above tax rates, the input tax credit cannot be claimed and a promoter needs to purchase at least 80% of the total value of inputs from registered suppliers.
If you’re still confused about GST charged on properties, don’t worry! We have got the best financial consultation available for you at no cost. Just visit our website to have your questions answered.
Hello! My name is Gurjari. I am an avid reader who likes to present her thoughts on paper sometimes. I have a knack for intellectual conversations, books, SEO, data, and content writing.
Working at Propertyyy.com as a Content Writer intern has made me enjoy writing. I have thoroughly enjoyed being a part of a startup.
Someday, I wish to live in a world where everyone, including me, is happy and living in peace.
Leave a Reply ·
You must be logged in to post a comment.