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Query Answer
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A Individual wants to construct 6 Row Houses for sale purpose
Plot Area 725.48 SQ MT
Row House Carpet Area 115 SQ. MT
Land Cost Approx 42 Lakh
Sale Price 20 x 6 = 120 Lakh
Material Purchased 50 Lakh Approx

What is applicability of GST on this?
How to save GST?

 Reply

The GST rate on construction services is 18%. However, the effective rate paid on property transaction would be 12%, as GST at the rate of 18% is levied only on 2/3rd of the amount for the property; 1/3rd of the amount is deemed as value of land or undivided share of land supplied to the buyer and is not taxable under GST. Further ITC is also available towards purchase of construction material in this case.

And if the construction service meets the following criteria, no GST will be applicable.

As per notification no. 11/2017 Central Tax (Rate),  No GST will be applicable on Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, if the entire consideration has been received after issuance of completion certificate, where required, by the competent authority; or after its first occupation, whichever is earlier.

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