Meaning of ‘Construction Services’ under GST Law,2017:

As per Section 2(119) of the CGST Act, 2017 as ‘works contract’ means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.”

As per the GST (Goods and Services Tax) law, construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer is a supply of service and hence, is liable to the goods and services tax (GST). However, no GST is meant to be paid on ready to move in or completed property as per the CGST Act, 2017. The GST is payable only on the under construction houses.

Construction Services under GST

Schedule II of the CGST Act, 2017 pertains to activities or transactions to be treated as “ Supply of goods or supply of services “.

5(b) of Schedule-IISupply of services” Construction of complex, building, civil structure or a part thereof , including a complex or building intended for sale to a buyer, wholly or partly, except where 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.”

Original Work means : As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2(zs) “Original Works” means all new constructions. They are

(i) All types of additional and alterations to abandoned or damaged structures on land that are required to make them workable,

(ii) Erection, commissioning or installation of plant, machinery or equipment or structures whether pre-fabricated or otherwise.

Residential Complex: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2 (zzb) “Residential Complex” means any complex comprising of a building or buildings having more than one single residential unit.

Single Residential Unit: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 2 (zze), “Single Residential Unit” means a self-contained residential unit which is designed for use wholly or principally for residential purposes for one family.

 Apartment: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3(v) of the notification, The term ‘Apartment means” shall have the same meaning as assigned to it in clause (E) under section 2 of the Real Estate (Regulation and Development) Act,2016.

Whereas, as per Sec.2€ of the RERA Act, The term “Apartment” whether called as block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit tenement, unit or by any other name, means a separate ad self – contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of land , used or intended to be used for any residential or commercial use such as residence,, office shop, show room, or godown or for carrying on any business, occupation, profession or trade or for any other type of use ancillary to the purpose specified.

Affordable Residential Apartment: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3 (vi) of the notification. The term “Affordable Residential Apartment” shall have meaning assigned to it in the notification No. 11/2017-Central Tax (Rate), published in the Gazette of India, Extraordinary Part II, Sec.3, Sub-Section(i) dated. 28th June, 2017 vide GSR No.690 E  dated. 28th June, 2017.

Promoter: As per Notification No. 12/2017-CT (Rate), dated. 28th June, 2017, Para 3(vii) and further Notification No. 04/2019–Central Tax (Rate), dated. 29.03.2019, w.e.f. 01.04.2019. The term “Promoter” shall have the same meaning as assigned i=to it in clause (zk) under section 2 of the Real Estate (regulation and Development) Act, 2016. Whereas, as per section 2(zk) of the RERA Act, the term “Promoter means

(i). A person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or

(ii). A person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon, or

(iii). Any development authority or any other public body in respect of allottees of:-

(a) Buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or

(b) Plots owned by such authority or body or placed at their disposal by the Government for the purpose of selling all or some of the apartments or plots; or

(iv). an apex State level co-operative housing finance society and a primary co-operative housing society which constructions apartments or buildings for its members or in respect of the allottees of such apartments or buildings; or

(v). Any other person who acts himself as a builder, colonizer, contractor, developer, Estate developer or by any other name or claims to be acting’s as the holder of a power of attorney from the owner of the and on which the building or apartment is constructed or plot is developed for sale ; or

(vi). Such other person who constructs any building or apartment for sale to the general public.

Explanation:- For the purpose of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters ad shall be jointly liable as such for the functions and responsibilities specified  under this Act or the rules and regulations made thereunder.

Landowner Promoter: Landowner Promoter means as per Explanation given in the Notification No. 03/2019-CT(Rate) , dated. 29th March, 2019, a promoter who transfer the land or development rights or FSI to a developer-promoter for construction of apartments and receives constructed apartments against such transferred rights and sells such apartments to his buyers independently.

Developer Promoter: Developer Promoter means as per Explanation given in the Notification No. 03/2019-CT(Rate), dated. 29th March, 2019, a promoter who constructs or converts a buildings into apartments or develops a plot for sale.

Project: As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (viii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019, The term ‘Project” shall mean a Real Estate Project or a Residential Real Estate Project.

Real Estate Project (REP):  As per Notification No 12/2017-CT(Rate) , dated. 28th June, 2017, Para 3 (ix) further notification No. 04/2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Real Estate Project (REP)” shall have the same meaning as assigned to it in clause (zn) under Section 2 of the Real Estate (Regulation and Development) Act, 2016, whereas as per section 2 (zn) of the RERA Act “Real Estate Project means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments as the case may be, and includes the common areas, the development works , all improvements and structures thereon, and all easement rights and appurtenances belonging thereto.

Residential Real Estate Project (REP): As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (x) further notification No. 04/2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Residential Real Estate Project (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15% of the total carpet area of all the apartments in the REP.

Carpet Area:- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xi) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019. The term “Carpet Area” shall have the same meaning as assigned to it clause (k) under section 2 of the Real Estate (Regulation and Development) Act, 2016, where, as per section 2 (zk) of the RER Act, Carpet Area” means net usable floor of an apartment, excluding the area covered by the external walls, area under services shafts, exclusive balcony or verandah area and exclusive open terrace area , but includes the area covered by the internal partition walls of the apartment.

An Apartment booked on or before the date of issuance of completion certificate or first occupation of the project: :- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019,”An Apartment booked on or before the date of issuance of completion certificate or first occupation of the project “shall means an apartment which meets all the following three conditions  namely:-

(a) Part of supply of construction of the apartment service has time of supply on or before the said date; and

(b) Consideration equal to at least one installment has been credited to the bank account of the registered person on or before the said date; and

(c) An allotment letter or sale agreement or any other similar document evidencing booking of the apartment has been issued on or before the said date.

Floor Space Index (FSI): :- As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xiii) further notification No. 04.2019-Central Tax (Rate) dated. 29.03.2019, w.e.f. 01.04.2019,” Floor Space Index (FSI) shall means the ratio of a building’s total floor area (Gross Floor Area) to the size of the piece of land upon which it is built.

Affordable Residential Apartment: As per Notification No 12/2017-CT(Rate), dated. 28th June, 2017, Para 3 (xiii) further notification No. 04.2019-Central Tax (Rate)  dated. 29.03.2019, w.e.f. 01.04.2019,The term ‘Affordable Residential Apartment” shall mean:-

(a) A residential apartment n a project which commences on or after 1st Aprl, 2019, or in an going project in respect of which the promoter has not exercised option in the prescribed form to pay central tax on construction of apartments at the rates as specified for item (ie) or (if) against serial number 3, as the case may be , having carpet area not exceeding 60 square meter in metropolitan cities and 90 square meters in cities or towns other than metropolitan cities  and for which the gross amount charged is not more than forty five lakhs rupees.

For the purpose of this clause:-

(i) Metropolitan cities are Bengaluru , Chennai, Delhi NCR (limited to Delhi) Noida, Greater Noida, Ghaziabad Gurgaon, Faridabad), Hyderabad, Kolkata, and Mumbai (Whole of MMR) with their respective geographical Limits prescribed by an order issued by the Central Government or State Government in this regard;

(ii) Gross amount shall be the sum total of:-

A. Consideration charged for the services specified at item (i) and (ic) in column (3) against sl.3 in Table;

B. Amount charged for the transfer of land or undivided share of land , as the case may be including by way of lease or sublease; and

C. Any other amount charged by the promoter from the buyer of the apartment including preferential location charges , development charges, parking charges, common facility charges etc.

(b) An apartment being constructed in an ongoing project under any of the schemes specified in sub-item (b), sub-item(c),sub-item(d) and sub item(da) and sub-item(db) of item (iv) ,sub item(b) sub-item(c),sub-item(d) and sub-item(da)of item(v), and sub-item (c) of item(vi) , against serial number 3 of table above in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item(ie) or (if) against serial number 3 as the case may be.

Construction services are divided into 2 construction services:

(i) General Construction services for all complete constructions,

(ii) Specialized construction services like services related to parts of buildings or civil engineering works, rather than the complete construction services.

General Constructions services are divided into 6 categories. They are as below:

1. General Construction Services of single dwelling or multi dwelling or multi storied residential buildings,

2. General Construction Services of other residential buildings,

3. General Construction Services of industrial buildings,

4. General Construction Services of commercial buildings,

5. General Construction Services of other non-residential buildings.

6. General Construction Services of other buildings n.e.c.

Specialized construction services divided into 3 categories. They are as below:

1. Services involving repair, alterations, additions, replacements, renovation, maintenance or remodeling of the buildings covered above,

2. Site preparation services,

3. Building completion and finishing services.

General Construction services of buildings:

1. General Construction Services of single dwelling or multi dwelling or multi storied residential buildings: This services includes construction services of single dwelling or multi dwelling residential buildings and Construction Services of single storied or Multi Storied Residential Buildings. Service Account Code is 995411.

2. General Construction Services of other residential buildings: Construction services of residential buildings for communities, including residences for the elderly, students, children and other social groups such as retirement homes, hostels, fraternity homes, orphanages, homeless shelters etc. Service Account Code is 995412.

3. General Construction Services of industrial buildings:

(1) Construction services includes buildings used for production and assembly activities of industrial establishments.

(2) Factories, plants and workshops,

(3) Agricultural buildings including silos and other storage facilities etc., Service Account Code is 995413 for the above services as per GST Law, 2017.

4. General construction services of commercial buildings: The following Constructions are treated as “Construction services of commercial or administrative buildings “:-

(1) Buildings used primarily in the wholesale and retail trades,

(2) Shopping centers, shopping malls, department stores, detached shops and boutiques, indoor markets etc.,

(3) Warehouses,

(4) Exhibition halls,

(5) Office buildings and bank buildings,

(6) Air, Rail, or Road transport terminals,

(7) Parking garages and Petrol and service stations etc.,

(8) Service Account Code is 995414 for the above services as per GST Law, 2017.

5. General Construction services of other non-residential buildings: The following services are considering construction services of other –residential buildings under GST Law, 2017:-

(1) Public entertainment buildings such as cinemas, theatres, concert halls, dance halls and nightclubs,

(2) Hotels, motels, inns, hostels ad similar buildings,

(3) Restaurants,

(4) Educational buildings such as schools, colleges, universities, libraries, archives and museums etc.,

(5) Health-related buildings such as hospitals, clinics and sanatoria including veterinary clinics etc.,

(6) Indoor sports or recreation installations (ice rinks, gymnasia, indoor tennis courts, general purpose sports halls, boat sheds, boxing rings etc.,

(7) Convention and congress centers etc.,

(8) Religious buildings etc.,

(9) Prison buildings, law courts, parliament buildings etc.,

(10) Non-residential farm buildings etc.,

(11) Communication buildings (radio and television broadcast buildings, telephone exchange buildings, telecommunication centers etc.,

(12) Service Account Code is 995415 for the above services as per GST Law, 2017.

6. General Construction Services of other buildings n.e.c: This Construction Services of other buildings not elsewhere specified classified as” Construction Services of other buildings n.e.c. Service Account Code is 995416 as per GST Law,2017.

Eligibility of Input Tax: Up to 31st March,2019 the input tax credit (ITC) was available to supplier of construction services. But as per recent notification no. 3/2019, CT(Rate) dt. 29.3.2019, Input Tax Credit shall not be taken (Except to the extent as prescribed in Annexure –I in the case of REP other than RREP and in Annexure-II in the case of RREP. It may be noted that there is no bar in taking ITC for the supply of construction services mentioned against entries No. 3(ie) and (if). There is also no bar for residual entry at S.No.3(xii). Assesse can avail ITC for these entries.

Reverse Charge Mechanism : RCM is applicable as per  Notification No. 3/2019-Central Tax (Rate) dated. 29.03.2019. As per the above notification the below items are liable to RCM:-

(1) Inputs and input service s (other than cement and capital goods)

(a) Calculate tax payments on the shortfall at the end of the financial year,

(b) Tax liability shall be added to his output tax liability in the month not later han the month of JUNE following the end of the financial year.

(2) Cement: In the month in which it is received,

(3) Capital Goods: Since provisions are silent , hence in the month of receipt of these goods.

Rate of Tax for the purpose of RCM: Dear Colleagues for better understanding regarding RCM here with I am providing information in Table Form:

S.NO. Description Notification No. Rate of Tax
1 All inputs other than cement No. 8/2019-CT(Rate) dt. 29.03.2019 (Entry No. 452Q of Schedule-III)       18%
2 Cement No. 3/2019-CT ( R ) dated. 29.03.2019 Applicable Rate
3 All Input Services No. 3/2019-CT(R) dt. 29.3.2019 (Entry No. 39       18%
4 Capital Goods               —— Applicable Rate.

Requirement of Registration:

Requirement of registration under GST Law,2017:

As per Section 22 (1) of CGST Act, 2017 every supplier shall be liable to take registration in every State or UT from where he makes a taxable supply of goods /or services, if his aggregate turnover in a financial year exceeds threshold limit of Rs.20 Lakhs or 10 Lakhs in Easter States.

Example for aggregate turnover:

(1) If any taxable person (PAN Based) is having business turnover Rs. 15 Lakhs and Rs. 6 lakhs rental income on immovable property liable to  take GST registration.

(ii). If any taxable person (PAN Based)is having tax business turnover Rs 13 Lakhs and  Rs. 6 Lakhs rental income on immovable property not require to take registration (Rs.13 plus Rs. 6 lakhs = 19 Lakhs, no obligation to take registration.

(iii) Is any taxable person (PAN Based) is having Rs. 25 Lakhs business turnover and such business in “Individual Status” as per Individual PAN Based he has to take registration for such business and income from immovable property belongs to (HUF PAN BASED) and turnover on immovable property of Rs. 6 lakhs, there is no obligation to take GST registration under HUF capacity.

Rate of Tax Applicable:

I am providing applicable rate of tax under GST Law in table for better understanding:

S. No Entry No. Nature of Service Gross Rate Effective Rate
1 3(i)/R Affordable residential apartment in a RREP (Commenced on or after 01.04.2019 or ongoing projects opted for new rates) intended for sale @1.5% @1%
2 3(ia)/R Residential apartment (other affordable residential apartments) in a RREP (commenced on or after 01.04.2019) or ongoing projects opted for new rates), intended for sale @7.5%  @5%
3 3(ib)/R Commercial Apartments in a RREP (commenced on or after 01.04.2019 or ongoing projects opted for new rates) intended for sale @7.5% @5%
4 3(ic)/R Affordable residential apartment in REP, other than in a RREP (commenced on or after 01.04.2019, or ongoing projects opted for new rates), intended for sale @1.5% @1%
5 3(id)/R Residential apartment (other than affordable residential apartments) in  REP other than in a RREP (Commenced on or after 01.04.2019, or ongoing projects opted for new rates) intended for sale @7.5% @5%
6 3(ie)/R Ongoing projects in specified schemes (of lower rate of tax) where the promoter has not opted for new rates @12% @8%
7 3(if)/R Commercial Apartments in REP other than in RREP @18% @12%
8 3(if)/R Ongoing Residential apartments as on 31.03.2019 , other tha affordable residential apartments, where promoter has opted to pay at old rates (other than S.No1 to 6 above) @18% @12%

Note: Gross rate is the rate of specified in the respective entry, and effective rate is after one third deduction rom the total value towards value of land as specified in Paragraph 2 of the Notification No. 11/2017 –CTR dated. 28th June, 2017.

> Effective GST Rate on affordable housing has been reduced to 1% without the benefit of the ITC as against the earlier effective rate of @8% with ITC. Further new definition has been provided for the term “affordable housing”. For ongoing projects, the constructions under the specified scheme shall be called as “affordable residential apartments” even though they do not satisfy the area requirement (60 or 90 square meters) or Rs 45 Lakhs provided the promoter has opted to pay tax at new rates.

> Effective GST Rate for non-affordable housing has been reduced to 5% without Input Tax Credit from the earlier effective rate of 12% with Input Tax Credit.

> Amendments apply only to residential projects and not to commercial projects (except located in RREP).

> New GST rates are mandatory for new projects from 01st April,2019,

> Residential projects with 15% commercial space will be treated as residential projects,

> Transfer of Development Right, Long Term Lease and Floor Space Index etc., an Intermediate tax will be exempt from GST Tax on such residential properties on which GST is payable, otherwise GST shall be payable by the promoter on reverse charge basis on completion of project. Comprehensive Notifications have been issued in this regard,

> Builders of ongoing housing projects as on 31st March,2019 have been allowed to choose either of the two options. (i) Pay GST at existing rates till the completion of project, or (2) adopt the new GST rates. Option for the new rates could be exercised project wise,

> Option could be exercised up to 20 May,2019. If the specified form has not been filed , it shall be deemed that promoter has opted new rates,

> In the new regime , procurement of(80% of inputs and input services) an capital goods should be made from the registered dealer, other wise tax shall be paid on RCM basis by the Promoter,

> Project wise records and accounting shall maintained,

> Eligible Input Tax Credit on the ongoing projects shall be mandatory determined by the promoter as per formula laid down in the Notification within 6 months, notwithstanding he does not have any ITC balance as on 31 March, 2019. These calculations not only provide relief to the promoter to carry forwarded ITC to the next year 2019-20, but also make the promoter liable to reverse/pay the ITC excess availed (utilized or not) up to till 31st March, 2019 which depends upon project to project.

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91 Comments

  1. vincent says:

    sir , i am doing construction of homes, hotels and commercial buildings new and old renovation works..i didn’t register at any one of the above GST ..what i have to do ?

  2. D P Das says:

    Dear sir,
    Thanks for the valuable post and the guidance therein.
    Me working for a PMAY project. Please let me know whether we will get the Input Tax Credit (ITC) on Client prospective or Contractor’s prospective (keeping in mind, the details as mentioned in CGST Act 2017 (latest amendment 01-01-2022) copy Chapter-V Point 17 cl. 5( c) & (d) on “Apportionment of credit and blocked credits”. And whether the GST will come down to 1% from 12% as we recently using?

  3. Shirish Dixit says:

    My client is having a property of 3 storied tenant
    bldg, He & his 2 sister are owner & now going to redevelop the property by forming their partnership firm. Already deed is prepared, pan is obtained, TAN , GST, SHOP act regn, MSME regn is to be applied, wht else is required to start the work , after this bank a/c will be opened

    1. B.S.Seethapathi Rao says:

      Dear Sir, I have referred your query. You have to check with your civil engineer about whether he is registered under GST or not. If he has GST registration as a service provider as a consultant as civil engineer, then you are liable to pay GST on his supply of services.

  4. Natarajan Pashupathy Shanker says:

    sir please help. We have an incomplete project of 72 apartments that was started in 2012 and till today the builder has no funds to complete it.
    We formed the co operative hsg society and registered it to file a case in consumer court.
    Today as society we intend to collect around 4 lakhs per member and complete the construction of the flats in the project. We don’t intend to take any developing rights or conveyance deed as the builder will want the case withdrawn if he has to transfer development rights.
    Have we to register for gst nos. what is the procedure. How much is gst percent.

  5. RAMA says:

    sir
    i want to buy a land from a promoter, who first registers the land on your name you pay the full land value and then he enters into constn agreemnet , now the land is on owners name , what willbe the GST % to be paid on the cosntn agreeement.
    Kindly guide us.
    there are few villas he has been doing like that for some years.

    1. B.S.SEETHAPATHI RAO says:

      Dear Sir, thank you to refer my article, Regarding your query, you are undertaking construction of individual house or single house construction with material and labour you are liable to pay GST @18% and eligible to claim ITC on purchases made from registered supplier. so, you have to collect tax from your client @18% and out of which you have to reduce your ITC and net liability you have to pay GST department. Ex. Total cost of construction is Rs.25 lakhs your liability @18% Rs.4.50,000 minus you have ITC credit on purchases Rs.1,20,000/- net tax liability of Rs.3,30,000/- ) you have to eligible ITC on services also like engineer fee, machinery lease, man power supply etc., but you have to procure from GST registered dealers only.

    1. B.S.SEETHAPATHI RAO says:

      Dear Sir, Thank you to refer my article. With regards to your query. During construction period if you are not received any advances or entered an agreements, entire construction investment made you, under that circumstances it has come under the definition of immovable property, GST is not applicable.

  6. Mohd Ibrahim says:

    Dear sir .
    I am a mtech engineer going to start my on construction service in UP.
    My work will be constructing single bungalow type homes on land and the land will be of the respective owner who gave me the work to construct his house.
    My doubt is suppose total rate i give to the owner is 30 lakhs including materials and labour and say i make a profit of 5 lakhs in it so do i have to pay gst or not ?
    If 18% gst then i have to pay 18% of 30 lakhs as gst or 18% of 5 lakhs as gst

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you to refer my article. regarding your query “your contract price is including material and labour” under that circumstances you have to procure materials and services like machinery on rental basis,
      and services also from GST registered dealer , you are eligible to claim ITC and you are liable to pay GST @18%. (ex: total contract price is 30 Lakhs -Tax @18% =Rs.5,40,000 minus ITC on purchases from registered approx ITC available Rs.1,50,000/- Net liability is Rs.3,90,000/-. You are not eligible to pay GST @5% because you are executing other than government contracts.

      1. Kushagra Sah says:

        Hello Sir,

        May I know why is the GST on construction services so high? For example, if I quote a price of 50L to a customer, 18% GST on it equals Rs 9L. Listening to the tax amount the customer goes to other contractors who do it without GST. So isn’t such a high tax amount counterproductive? Like a customer would agree to pay a 5% tax, but not a 18% tax, when GST free contractors are easily available.

        1. B.S.SEETHAPATHI RAO says:

          Dear Sir, You have to charge GST on construction of building or apartments @18% and you are eligible to claim Input Tax Credit on inputs of goods and services net of tax you are liable to pay to the Government. So, you have to procured all goods and services from GST registered persons and asking TAX invoice. The difference of tax you have officer to your client as discount , then they will consider your price. Regarding fixing of GST rate is depend upon GST Council and Government policy.

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you to refer my article. with regards to your query I have given my opinion as below.
      The GST rate applicable to such commercial or residential transactions is 12% till 31st March 2019. From 1st April, the applicable GST Rates on residential real estate will be 5% for non-affordable housing properties and 1% for affordable housing properties.

  7. Abdul Nasrulla Khan says:

    Sir, I am working as Office Superintendent, my question is that is there any GST Deduction for the civil works whose value which dose not exceed 2.50 Lakhs. If so what is the Percentage of Deductions. Now we are deducting 12% on all civil works

    1. B.S.Seethapathi Rao says:

      Dear Sir, Thank you to refer my article. I have referred your query. Here with I am giving my opinion that regarding TDS under GST on Works Contract is if the contract value exceed Rd.2.5 Lakhs, you are liable to deduct TDS under GST Law and the rate of GST is applicable @2% on gross value, If the contractor is unregistered then you have to deduct GST TDS full rate of tax applicable on such contract.

  8. Atik ur rahman says:

    Am Ateeq ur Rehman. Sir I want to start a contractor business likes tiles mistri, block work , brick work all type work..So which one should I register in the gst..and what should be the name of the gst..please tell me sir

  9. Jigar M Shah says:

    Sir I have construction of bungalows and Land is not purchase by my firm. Member is paid land amount to direct land owner. So i have give pure construction service. in that case my gst rate is 18% including, 18% net Or 12%

    1. B.S.Seethapathi Rao says:

      Dear sir, Thank you to refer my article. With regards to your question you are not mentioned that who can purchase raw material for construction. If your contract is with material the rate of tax is applicable @18% and ITC is available to your contractor or materials are purchased by you and you have given purely labour contract the GST rate is applicable @18% no ITC is available on material purchase by your contractor . If you can construct bungalows and sell to owners under that circumstance you are eligible to claim ITC on material and also labour contractor. Because you are construct bungalow under the capacity of contractor for construction of bungalows.

  10. Ranjan Kumar Ram says:

    Sir,
    I am a building contractor taking contract to build civil and interior work with complete material for residential house not for sell. How much tax I have to pay on money transaction ? Please specify it in both condition , with ITC and without ITC

    1. B.S.Seethapathi Rao says:

      Dear sir, Thank you to refer my article. With regards to your doubt. here with I am providing my suggestion as below:
      Construction services comes under service sector. So, they are not eligible for composition. SO, the applicable rate of tax is @18% and eligible to claim ITC on inward supply of goods and services also. It is also advisable to you,

  11. Ranjan Kumar Ram says:

    Sir,
    I am a building contractor taking contract to build civil and interior work with complete material for residential house no for sell. How much tax I much tax i have to pay on money transaction ? Please specify it in both condition , with ITC and without ITC

  12. Rajini says:

    Hi we are just demolishing our old apartment 25 years old and building a new one in the same space, do we have to pay GST of 12% or 18%. The builder is cheating all of us and demanding more in the name of GST

    1. B.S.Seethapathi Rao says:

      Dear sir, Thank you to refer my article. With regards to your query here with I am providing my personal opinion that. You are liable to pay GST @18% to the builder and your builder is eligible to claim ITC on inward supply of goods and services . So, you have to negotiate with your builder to reduce GST rate because he is claim ITC. generally most of the companies are doing like this. This is my personal opinion as per today’s act position.

  13. Kalyan krishna says:

    Hi Experts,

    Could you please provide support in understanding what percentage will be applicable for GST for a under construction flat which is More than 90sq mts area and less than 45 Lakhs bought in September year 2020.

    We have Two Registered documents
    1) sale deed worth 29 lakhs includes Land cost with government rate included and Flint area is 1700sq.ft.
    2) Construction agreement worth 7 lakhs
    Builder is saying we need to pay 5% GST on both i.e 29lakhs +7 Lakhs = 36Lakhs will the amount for which he is saying 5% GST needs to be paid.
    3) Moreover sale deed already includes 62 sq yards *20000(govt land value)=12,40,000 rupees in the sale deed. We have total stamp duty is paid on sale deed value 29 lakhs.

    I am confused as different Auditors mentioning different percentages.

    Builder is saying 5% GST is applicable and needs to be paid for 36 lakhs. Please advise what is the correct percentage to be paid and do we need to consider land cost also i.e 12,40000 rupees for GST calculation???

    Please Help and support with you expertise.

    Thanks,
    Kalyan

  14. Sukant Sahoo says:

    Sir, I have purchased duplex from builder and construction is still ongoing. The agreement happened on July 2018. land registration completed on Jan 2019. What percentage GST i should pay to builder and When should I pay ?
    Builder is asking to Pay GST now (before completion of construction), shall I pay now?

  15. Shrudhan says:

    Sir , we have given our property for JV at 66: 33 ( owner : builder )& the project is nearly over . is there a GST that the owner has to pay – if so how is the calculation done & what is the %…thank you.

  16. Stella says:

    Sir, We are planning to give to building contract to an individual contractor. The total cost of the project is Rs.1crore.
    1. Should we pay any part of GST? OR should the contractor pay it?.
    2.We should deduct TDS on every payment we made. Is it 0.75% or 1.5% ?
    3. We are a trust and we do not have GST.
    Please guide us

  17. Kumar says:

    Hi Sir,
    I’m a CPWD contractor and got GST registered when it came into act. As my field is not related to GST I had no idea how GST works. I took few Works Contract till 2018 in Govt Sector, my GST consultant has been filing only gstr3b and haven’t filed any outward bill. Now going forward I want to file both gstr3b and Gst1 for all my works contract. But what should I do about the previous missed gst 1 filing? Also, my annual turnover till 2019 has been below 20lakhs only and my total work done since 2017 is 15 lakhs. Should I pay the missed 12% tax on 15 lakhs? Kindly guide..

  18. Karikalan says:

    my Land i have given Contract for construction for Home as per GST department given clarification for WCT. single residence unit means GST 12% this is correct.kindly confirm

    omposite supply of works contract as de ned
    in clause (119) of section 2 of the Central Goods
    and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,-
    (a) railways, excluding monorail and metro;
    (b) a single residential unit otherwise than as a part of a residential complex;
    (c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of A ordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

  19. NEHA says:

    A housing Society is getting construction work done through contractor whom they are paying GST 18% and collecting 12% GST on Advance from members for Flats, issuing receipts voucher against advances. Is this right? What will be its 6 digit HSN/SAC code and whether it is mandatory to be mention in Receipt Voucher? And if some advance received in pre GST period for which ST is paid and amount is now refunded back to customer in GST period, whether output tax liability need to be reversed and refund voucher need to be issued ? and how Refund vouchers should be treated in GSTR 1 as their is no Column for its treatment.

  20. NEHA says:

    A Housing Society, getting building construction done by a contractor for their members. Housing Society Charge 12% GST on Advance from their members and pay 18% to contractors for construction work and take the ITC ? Is this right? And What will be the 6 digits HSN/SAC Code? And the society is issing receipts vouchers for advance received whether HSN/SAC need to be mention in receipt vouchers?

  21. Mahendran says:

    i am running General Construction Services of industrial buildings and resident house his total tornover 25 lakhs approx. In the financial year 2019-20.
    what is gst rate?
    i am liable to pay gst yes or no.

    He is liable to gst registration?

  22. shavinder kumar says:

    Sir , We are in the busssiness commerical projtcect in punjab. My question is that can we claim the itc if we option availed without itc . can that option we now changed.

  23. Venkatesh says:

    Sir I’m a government contractor doing only government cc road, dam and gov buildings.
    1. What is the GST rate & SAC code?
    2. Can I take ITC of Goods purchased for cc roads, dam & Tax gov building construction?
    3. Please comment with notified section, thank you.

  24. Kartick Kumar Chandra says:

    Sir,
    I( Developer) took a land from land owner and agreed with build up 3 storied building.(40: 60) ratio. I have paid sum of money for procession of land 2017(may).
    Now building is almost ready Cc not available and i took a sum of money from buyer(one of flat) sept,2020.,
    is I am liable to pay GST on advance money?

    What will be the treatment if I will take full money of this particular flat before CC?

    What will be the treatment if I will take money after Cc?

    Is there was any liability the amount paid to land lord?
    waiting for reply?

  25. Irshad parhan says:

    Sir,

    My brother business is General Construction Services of industrial buildings his total tornover 25 lakhs approx. In the financial year 2019-20.
    Including labour. material all.

    He is liable to gst registration?

    He is individual firm.
    Till he is not get gst number.

  26. Er Ismail Khan says:

    I am a civil engineer & contractor my question is I purchased 1500 plot & construct a house 2bhk 1000 sq.ft for selling purpose what is the liability of gst on me & the purchaser I’m the newest for gst & how to file return monthly or quarterly
    Please help iam total confused approximately plot cost 6lakhs & construction cost 15 lakhs & selling price approximately 23 to 24 lakhs
    Please guide
    Mo: 9422833060

  27. Sanjay says:

    Sir
    I am getting 1st floor of house constructed by contractor. Cost includes material cost of cement, steel etc and labor charges. Please advise if GST is charged on both Materials and Labor or is it only for labor.
    If I am getting it constructed myself , will there be any GST

  28. Kratika says:

    What is the GST tax rate on the contractor involved in construction of building and does ITC is available to him and to what extent?

  29. Anil Sharma says:

    We are working as Collaborator of Residential Buildings. We construct Residential Units (Floors) in Delhi, in lieu to compensate Construction Cost property owners transfer one / two Floors to us.

    We get our construction works through contractors on Cost Plus Profit Basis. (10%). How much GST rate we shall compensate to contractor in this model ??

    In case we are not interested in without input tax credit scheme what will be applicable GST Rate ??

  30. Rajendra sethia says:

    80% supply from registered person will include labour charges or materials only ? Developer is not given labour contract. Please guide.

  31. Sri says:

    Mr. Seethapathi
    could you pl clarify wht GST rate will apply in the follwiing case
    Q1) if i buy plot of land – is there GST applicable and if so what is the rate
    Q2) if i buy land and get a architect / contractor to nuild house for my own residential use – is there GST applicable and if so what is the rate
    Q3) if teh seller of the plot themselves build my house – is there GST applicable and if so what is the rate

  32. Harsha says:

    Dear Sir,
    We are apartment association and our turnover exceeds 20 lakhs but monthly maintenance is less that 7500. But we do have commercial activities going on in the residential complex and turn over is less than 20 lakhs. Should we need GST registration for the apartment association.

  33. anshu agarwal says:

    as per section 7(1A) of CGST Act 2017 as amended vide CGST (Amendment Act ) 2018, any activity which passes test of section 7(1), should be referred to schedule II.
    “7(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.]”

    I have a doubt, that how construction of buildings is covered within the scope of supply? As it is neither covered in section 7(1) nor covered in schedule I.

    Probably there is some loophole in the GST law regarding covering construction activities within the scope of supply.

  34. Aswani kumar says:

    Sir
    I am a gst registered building contractor which is my gst rate 18percentage or 12 percentage for getting input tax credit
    Please clarify

  35. P V V PRASADA RAO says:

    NOTES ON REVERSAL OF TRAN-1 CREDIT IN RESPECT OF CONSTRUCTION OF RESIDENTIAL COMLEX SERVICE. A TAX PAYER HAS AVAILED CENVAT CREDIT THROUGH TRAN-1. DEPT., HAS ASKED TO REVERSE THE AVAILMENT OF CENVAT CREDIT. DETAILS PLEASE.

  36. H. S. VIJAY says:

    1. What is the GST applicable on Govt. Contracts?
    2. All SR’s say that GST applicable is 12%. But when labour component is added then it is automatically calls for 18%.
    3. Why HSN codes are not made applied to Govt. Contracts?
    Please clarify.
    Regards.
    H. S. Vijay

  37. Saurabh shrivastava says:

    Very nice post .Sir please clarify can we take gst refund or adjust with current year liabilities which we have deposited before 31 mar 19

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