GST on flats & property
GST on under-construction and resale flats, parking/PLC/club charges, maintenance bills, brokerage and plots.
Questions answered
Key laws, rules, forms and judgments
CGST Act 2017 - real estate relevance
GST on real estate is built from several Act provisions read together, not one flat tax. Completed property and land sales sit outside GST; construction sold before completion is taxed as a service.
Central Goods and Services Tax Act, 2017 (No. 12 of 2017) · in force · source
Schedule II, para 5(b): construction treated as a 'service'
Selling a flat before the building gets its completion/occupancy certificate (CC/OC) counts as a taxable 'construction service'. Once the full price is received only after CC/OC (or first occupation), GST no longer applies.
CGST Act 2017, Schedule II, paragraph 5(b) · in force · source
Schedule III, para 5: sale of land/completed building is not a 'supply'
Plain land, and a building whose full price is collected only after CC/OC, are treated as neither goods nor services - so no GST applies. Only state stamp duty and registration charges apply.
CGST Act 2017, Schedule III, paragraph 5 · in force · source
Section 17(5)(c)/(d): blocked input tax credit on construction
Blocks GST credit on construction of a building for own business use (e.g. a mall to rent out). The Supreme Court eased this in 2024 for 'plant'-like buildings, but Parliament narrowed that relief again in 2025.
CGST Act 2017 s.17(5)(c)/(d), amended by Finance Act 2025 · amended · source
IGST Act s.12(3): place of supply for immovable-property services
For services tied to a property - architects, agents, interior decorators, construction coordination - GST follows where the PROPERTY is located, not where the buyer or professional is based.
Integrated GST Act 2017, section 12(3) · in force · source
CGST Rules 42 & 43: splitting input tax credit for developers
A developer with both GST-free flats (no ITC) and taxable space (with ITC) in one project cannot claim full credit on shared costs like cement. Rules 42/43 give the exact formula to split and reverse that shared credit.
CGST Rules 2017 - Rule 42 (inputs/services) and Rule 43 (capital goods) · in force · source
GST registration threshold for developers, agents and contractors
Anyone supplying construction, works-contract or brokerage services must register once turnover crosses the SERVICES threshold - lower than the Rs 40-lakh threshold Notification 10/2019-CT gave to pure goods traders.
CGST Act 2017, section 22 (services threshold; Notification 10/2019-CT raised only the goods threshold) · in force · source
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
Notification 3/2019-CT(R): the 1% / 5% no-ITC housing scheme
From 1 April 2019, new residential projects charge only 1% (affordable) or 5% (other residential) GST - down from 12% - but the builder gets no input tax credit. This is the rate most new-launch flats still carry.
Notification No. 03/2019-Central Tax (Rate) · in force · 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
Notification 4/2019-CT(R): TDR/FSI/long-term lease exemption for residential
When a landowner gives a builder development rights (TDR), extra FSI, or a long-term land lease for constructed flats, that transfer is GST-exempt - but only for the flats sold before the project's completion certificate.
Notification No. 04/2019-Central Tax (Rate) · in force · source
Notification 5/2019-CT(R): reverse charge on TDR/FSI/lease to promoter
Where GST does fall due on development rights/FSI (the unsold-unit portion), the developer who receives the rights must pay it directly under reverse charge - not the landowner.
Notification No. 05/2019-Central Tax (Rate) · in force · source
Notification 6/2019-CT(R): time of supply for JDA transactions
Fixes exactly WHEN GST becomes due on a Joint Development Agreement, both ways - triggered by the completion certificate date, not the date the JDA is signed.
Notification No. 06/2019-Central Tax (Rate) · in force · source
Notifications 7 & 8/2019-CT(R): 80% procurement rule and RCM on shortfall
Requires builders to buy at least 80% of project inputs from GST-registered vendors. Falling short means the builder must self-pay GST on the shortfall under reverse charge.
Notification No. 07/2019-CT(R) and No. 08/2019-CT(R) · amended · source
GST 2.0 (56th Council): cement rate cut, real-estate scheme untouched
India's biggest GST rate overhaul since 2017 moved most goods to a 5%/18% structure and cut cement from 28% to 18%. The 1%/5%/12% rates buyers actually pay on flats were NOT changed by this reform.
56th GST Council recommendations; rate notifications effective 22-09-2025 · 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
RCM on renting of residential dwelling to a registered person (2022)
Since July 2022, if a GST-registered business rents a residential flat, the TENANT pays GST under reverse charge - the landlord does not bill it. A registered individual renting purely for personal residence is not covered.
Notification No. 05/2022-Central Tax (Rate) · in force · source
RCM on renting of commercial property by an unregistered person (2024)
From 10 October 2024, if an unregistered landlord rents a shop/office to a GST-registered tenant, the tenant must pay the 18% GST directly under reverse charge - closing a gap where such rent went untaxed.
Notification No. 09/2024-Central Tax (Rate); amended by 07/2025-CT · in force · source
GST on housing-society maintenance charges: Rs 7,500/month threshold
A society only charges GST on maintenance if BOTH its annual collection exceeds Rs 20 lakh AND a member is billed over Rs 7,500/month. Cross either limit and 18% GST applies on the FULL amount, not just the excess.
Circular No. 109/28/2019-GST · in force · source
GST does not apply to stamp duty or registration charges
Stamp duty and registration fees are state levies on the transfer document itself, wholly separate from GST. You will never see GST charged on the stamp duty or registration line of a property deal.
CGST Act 2017 read with respective State Stamp Acts · in force · source
No GST on a flat bought after completion/occupancy certificate
If the builder already has the CC/OC before you pay anything and sign, the sale counts as a finished building - no GST, only stamp duty and registration.
CGST Act 2017, Schedule II para 5(b) and Schedule III para 5 · in force · source
GST on plotted development (sale of developed plots)
Selling a plot - even one with roads, drainage and utility lines already laid - is generally treated as 'sale of land' and stays outside GST, as long as it isn't billed as a separate 'development service'.
CGST Act Schedule III para 5; Karnataka AAAR (Rabia Khanum), 14 Feb 2023 · in force · source
GST on TDR/FSI outside the residential exemption: 18%
Outside the specific residential exemption (Notification 4/2019), transferring TDR or extra FSI is a taxable service at 18% GST, classified under real-estate services.
Notification 11/2017-CT(R) heading 9972; Maharashtra AAAR (Vilas Chandanmal Gandhi), 26 Aug 2020 · in force · source
GST on long-term lease premium and assignment of leasehold rights
An upfront premium for a long-term government land lease is GST-exempt even paid in instalments. When the ORIGINAL lessee later assigns that leasehold to a buyer, 2025-2026 court rulings say that's a property transfer, not a service - no GST there either.
Circular No. 101/20/2019-GST; Notification 12/2017-CT(R) Sl. No. 41 · amended · source
GST on real-estate brokerage/agent commission: 18%
A real-estate agent's commission - paid by buyer, seller, landlord or tenant - is a taxable service at 18% GST, once the broker's turnover crosses the Rs 20 lakh registration threshold.
Notification 11/2017-CT(R), heading 9972/997221 · in force · 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
GST on parking, PLC and club-membership charges bundled with a flat
Parking, Preferential Location Charges (PLC) and one-time club/amenity fees billed by the promoter along with your flat are taxed at the SAME GST rate as the flat itself, not separately, since they're bundled into one construction-service supply.
CBIC FAQ (Part II) on real estate, 14 May 2019 · in force · source
ITC cheat-sheet: which real-estate GST rates carry input credit
The low 1%/5% flat-sale rates come with NO input tax credit for the builder, while the 12% commercial rate keeps full credit - worth knowing before negotiating a flat price or a builder's cost claims.
Notification 11/2017-CT(R) as amended · in force · source
CBIC FAQ on real estate (Part I) - 7 May 2019
CBIC's first official Q&A explaining the just-launched 1%/5% housing scheme - how builders choose rates, the old-vs-new option for ongoing projects, and worked examples. Still the reference document for how the scheme operates.
CBIC FAQ on GST rate structure for real estate, Part I · in force · source
CBIC FAQ on real estate (Part II) - 14 May 2019
A follow-up set of Q&As released a week after Part I, going deeper into Joint Development Agreements, landowner-promoter flats and TDR/FSI valuation - the go-to reference for JDA GST questions.
CBIC FAQ on GST rate structure for real estate, Part II · in force · source
Circular 101/20/2019-GST: instalment payment of long-term lease premium
Confirms the GST exemption on upfront premium for a long-term (30-year+) industrial/institutional land lease applies even when paid in instalments, not just as one lump sum.
Circular No. 101/20/2019-GST · in force · source
Circular 188/20/2022-GST: refund of GST to unregistered flat buyers on cancellation
Lets an unregistered buyer who cancels a flat booking (after the builder's credit-note window has closed) personally claim back the GST already paid, via a refund application on the GST portal using PAN.
Circular No. 188/20/2022-GST · in force · source
JDA / landowner-promoter GST treatment - consolidated CBIC guidance
No single numbered 'JDA circular' exists - guidance is spread across FAQ Part II and three notifications: landowner's TDR transfer is generally exempt (pre-CC-sold portion), developer pays residual RCM, both time to the CC date.
CBIC FAQ Part II (14 May 2019) with Notifications 4/2019, 5/2019, 6/2019-CT(R) · in force · source
CBIC FAQs on 56th GST Council decisions (Sep 2025)
Official Q&A released right after the September 2025 Council meeting, explaining the new 5%/18%/40% slab structure and rate changes (including cement) ahead of the 22 Sep 2025 rollout.
FAQs on the decisions of the 56th GST Council · in force · source
CBIC FAQs-2 on 56th GST Council decisions (Sep 2025)
A second round of official clarifications issued just before the 22 Sep 2025 GST 2.0 rollout, resolving extra implementation questions raised by trade and industry after the first FAQ.
FAQs-2 on the decisions of the 56th GST Council · in force · source
GSTR-1: outward-supply return for developers
Every registered developer must report each month/quarter the invoices raised for units sold, including how much was taxable at 1%/5%/12% and how much was exempt. Buyers can cross-check this via the GST portal.
FORM GSTR-1 · in force · source
GSTR-3B: summary return and tax payment for developers
The monthly/quarterly self-assessed return where a developer actually pays GST - including cash payment of 1%/5% tax, reverse-charge liability (TDR/cement shortfall) and Rule 42/43 ITC reversal for mixed projects.
FORM GSTR-3B · in force · source
FORM DRC-03: voluntary GST payment (common in developer audits)
Used to voluntarily pay tax, interest or penalty outside the normal return flow - very common for developers after a GST audit flags a Rule 42/43 or RCM shortfall, before a formal demand notice is issued.
FORM GST DRC-03 · in force · source
FORM GST RFD-01 (unregistered person): buyer's GST refund on cancellation
The refund application an ordinary home buyer files on the GST portal to recover GST paid on a booking that was later cancelled - the practical, buyer-facing form behind Circular 188/20/2022-GST.
FORM GST RFD-01, category 'Refund for unregistered person' · in force · source
FORM GST REG-01: registration for developers, agents and contractors
The standard application to get a GSTIN, which any developer, brokerage firm or contractor must file once liable to register, before it can legally charge or pay GST.
FORM GST REG-01 · in force · source
From CAPGAIN's law library (66 records in this area), checked 25 Sept 2026. Records still awaiting confirmation are not shown here.