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GST on an under-construction flat in 2026

Short answer: As of September 2026, the April-2019 rates still apply unchanged: 1% (no ITC) for qualifying affordable homes, 5% (no ITC) for other residential, 12% (with ITC) for commercial. None were altered by GST 2.0 or any 2026 Council decision so far.

Law: Notification 11/2017-CT(R) as amended, with the 2019 rate package · Authority: CBIC · Status: in force · Checked 25 Sept 2026

What you need to know

Affordable housing (<=45 lakh, <=60/90 sqm): 1% GST
Other residential (new projects): 5% GST
Commercial (non-RREP): 12% GST, with ITC

Who this applies to: buyers/NRIs

Official / primary source: rustomjee.com

The law behind it

Notification 11/2017-CT(R): base construction-service rates

The master notification fixing GST rates for construction/works-contract services (heading 9954). Originally 18% (effectively 12% after a 1/3rd land deduction); heavily amended since, especially by the 2019 housing package.

Notification No. 11/2017-Central Tax (Rate) · amended · source

GST on works contracts in construction

A 'works contract' (contractor builds using own materials) is a separate taxable service, generally 18% with ITC. Several lower government-linked concessional rates were removed in Sep 2025.

Notification 11/2017-CT(R) as amended; 56th GST Council recommendations · amended · source

Definition of 'affordable housing' for the 1% GST rate

A flat needs to meet both a size limit and a price cap to get the 1% rate. Missing either pushes it to the higher 5% 'other residential' rate instead.

Notification 11/2017-CT(R) Annexure, as amended by 3/2019-CT(R) · in force · source

GST on commercial property (office/shop) purchase: 12% with ITC

Buying an under-construction office/shop (outside a mainly-residential project) is taxed at 12% GST, and here the builder CAN claim input tax credit. Confirmed unchanged even after the Sep 2025 GST 2.0 reform.

Notification 11/2017-CT(R) as amended by 03/2019-CT(R), item (id) · in force · source

Work out your own numbers

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