GST generally applies when an under-construction apartment is sold before the completion certificate or first occupation. Common effective rates are 1% for qualifying affordable residential apartments and 5% for other residential apartments, both without input tax credit under the prescribed scheme. A sale after completion certificate or first occupation, whichever is earlier, is generally outside GST.
Use the rule effective on the transaction date
This guide is a decision aid. GST rates, exemptions, valuation rules and portal procedures can change through notifications and circulars. Match the exact supply, HSN or SAC, parties, place of supply and invoice date against the current official material.
Do not file from a headline rate alone. Preserve the notification, classification working and transaction documents supporting the treatment selected.
When GST applies
The timing of the sale is decisive. A builder’s supply of construction linked to a sale before completion is generally taxable. A transfer of a completed building after the completion certificate or first occupation is generally treated as a sale of building rather than a taxable construction service.
Rates and affordable-housing test
Do not decide the rate from the marketing label alone. Affordable residential apartment status depends on the prescribed carpet-area and value conditions. Other residential apartments in covered projects commonly fall under the 5% without-ITC scheme.
1 · IdentifyTransaction facts
2 · ClassifyHSN or SAC
3 · VerifyRate and date
4 · DocumentInvoice and return
How the taxable value works
The notified mechanism generally deems one-third of the total amount to represent land for specified construction-service valuation. The legal result can depend on the agreement, development rights, project structure and later judicial or notification developments.
Input tax credit and builder obligations
Under the 1% and 5% residential scheme the promoter ordinarily cannot claim ITC for the covered supply and must satisfy procurement and reporting conditions. Buyers should not assume that GST paid on a personal home is recoverable.
Buyer invoice checklist
Match the promoter GSTIN, project and unit details, construction-linked demand, taxable value, rate, tax amount and payment receipt. Keep the allotment letter, agreement, demand notices, invoices, possession record and completion certificate.
Common mistakes
Charging GST on a qualifying completed-property sale, treating every home as affordable housing, calculating GST only on instalments without checking total consideration, or confusing stamp duty and registration charges with GST can create disputes.
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Request GST supportFrequently asked questions
Is GST payable on a ready-to-move apartment?
Generally not when the sale occurs after completion certificate or first occupation, whichever is earlier.
What is the GST rate on an under-construction flat?
Common effective rates are 1% for qualifying affordable housing and 5% for other covered residential apartments, without ITC.
Is stamp duty included in GST?
No. Stamp duty and registration charges are separate state-law costs.
Can a homebuyer claim ITC?
A buyer purchasing for personal residential use ordinarily cannot claim business ITC.
Does resale attract GST?
An ordinary resale of a completed apartment is generally not a taxable construction service.
Can a builder call any project affordable?
No. The notified carpet-area, value and project conditions control.
