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The Centre on Saturday made it clear that buyers of constructed property need not fork out 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.
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, an official release said. 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 Government etc, would attract GST of 8 per cent, the release added.
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 books of account to pay the output GST. For projects other than affordable segment, 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, the release said. For builders, the main message from Government is that the effective GST incidence for affordable segment and for other segment has not increased as compared to pre-GST regime.
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