New Delhi: The finance ministry on Saturday said buyers of real estate properties for which completion certificate is issued at the time of sale will not have to pay GST. However, Goods and Services Tax (GST) is applicable on the sale of under-construction property or ready-to-move-in flats where completion certificate is not issued at the time of sale.
“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 said in a statement.
The ministry also asked builders to reduce prices of properties by passing on the benefit of lower GST rate to customers. “Builders are also required to pass on the benefits of lower tax burden to buyers of property by way of reduced prices/ installments, where effective tax rate has been down."
Affordable housing projects, including the Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of state governments attract 8% GST, which can be adjusted by builders against its accumulated input tax credit (ITC), the ministry said.
“For such (affordable housing) projects, after offsetting ITC, 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."
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.