The GST is applicable on sale of under construction property, said Ministry of Finance.
New Delhi: The
government on Saturday said that buyers of real estate properties will
not have to pay Goods and Services Tax (GST) if they purchase the fully
constructed property after the issue of completion certificate.
"It
is brought to the notice of buyers of constructed property that there
is no GST on sale of
complex/building and ready-to-move-in flats where
sale takes place after issue of completion certificate by the competent
authority," the Ministry of Finance said in a statement.
The GST
is applicable on sale of under construction property or ready-to-move-in
flats where completion certificate has not been issued at the time of
sale, it said.
The Ministry further said that housing projects in
the affordable segment such as Jawaharlal Nehru National Urban Renewal
Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other
housing scheme of state governments will attract GST of eight per cent.
"For
such projects, after offsetting input tax credit, the builder or
developer in most cases will not be required to pay GST in cash as the
builder would have enough ITC in his account books to pay the output
GST," the statement said.
For projects other than affordable
segment, the government said it is expected that the cost of the
complex/buildings/flats would not have gone up due to implementation of
GST.
"Builders are also required to pass on the benefits of lower
tax burden to the buyers of property by way of reduced
prices/instalments, where effective tax rate has been down," it said