GST applies to real estate transactions, impacting developers, builders, and buyers.

GST Rates on Real Estate

1. Residential properties:
   • Under Affordable Housing: 1% GST
   • Other than Affordable Housing: 5% GST
2. Commercial properties: 12% GST
3. Under-construction properties: 12% GST (effective rate 5% or 1% after considering input tax credit)

GST Implications on Real Estate

1. Input Tax Credit (ITC): Developers can claim ITC on inputs (e.g., cement, steel).
2. GST on construction materials: Increases costs for developers.
3. No GST on completed properties: Buyers don’t pay GST on ready-to-move-in properties.

GST Benefits for Homebuyers

1. Reduced tax burden: GST replaces multiple taxes (Service Tax, VAT, etc.).
2. Increased transparency: GST invoicing ensures clarity on taxes paid.

GST Challenges for Developers

1. Increased compliance costs.
2. Complexity in GST calculations.
3. Potential GST liability on unsold inventory.

GST Exemptions for Real Estate

1. Renting of residential properties.
2. Sale of land (without development).
3. Properties under 15 meters in carpet area.

GST Calculations for Real Estate

1. GST calculation on construction value.
2. GST calculation on sale value.

References

1. GST Act, 2017.
2. GST Rules, 2017.
3. CBIC notifications.
4. Real estate industry reports.