Dear Friends,

At present huge confusion is going on for rates of GST for construction services , go through with following rates as Notified by Govt.:

A. Rate as per “Rate Booklet published by CBEC on 3rd July, 2017:

Item No. 7. Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly (the value of land is deemed to be one-third of the total amount charged for such supplies) 12% with no refund of accumulated ITC.

Item No. 9 at List of services in the List @18%: All other services not specified elsewhere @18% i.e applicable for works contract.

B. Rate as per the Notification No.11 dated 28/06/2017:

3. Heading 9954 -(Construction services) – 18%

– (i) 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, 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. (Provisions of paragraph 2 of this notification shall apply for valuation of this service)

Opinion:

Now after going through above rate notifications, kindly note following:

1. If Construction of complex, building etc intended for sale to buyer along with land then rate is 12%. (i.e. 18% less 33% rebate for land = 12.06%), No overflow of ITC is allowed

2. If Construction of complex, building etc intended for sale to buyer without land then rate is 18%.

3. Works contract rate is @18% with full ITC but no ITC is allowed to ultimate consumer even if he used it for business of furtherance of business, for example if on my plot I made shops & rent out even then I will not get ITC but the contractor who made for me shops will get ITC on billing to me.

IN MY OPINION AT NOIDA/GREATER NOIDA LAND IS NEVER SOLD IT IS ALLOTTED ON LEASE HOLD BASIS THEREFORE @18% RATE WILL BE APPLICABLE.

Click here to know about GSTR-3B

Check GST Common portal for More Information

Author Bio

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (6832)
Type : Articles (16959)
Tags : goods and services tax (5315) GST (4918)

3 responses to “GST applicability on Construction Service”

  1. Tamal Mohanta says:

    Please explain whether gst is applicable for under construction building having less than 12 flats in it.according to circular no- 108/02/2009 dated 29-01-2009 service tax is applicable for under construction building having more than 12 flats in it.GST replaced service tax in real estate. So whether this circular will be applicable for gst or not.

  2. Khurram Hussain says:

    Dear Sir,

    I have a flat in Gurgoan, and I have been handed over the notice of possession. I only had my last installment due that is payment on offer of possession. The balance I had paid as early as May’16 and then also paid them approx 2 lacs under the VAT amnesty scheme in February’2017 . They are now asking us to pay GST @ 12%. But how do I determine on what amount is this 12% GST to be calculated, is it on the BSC only or BSC + EDC + IDC + RFMS??
    Thanking you in anticipation.

  3. Vinod Kumar Tyagi says:

    Notification No. 8/2017-Integrated Tax (Rate) 28th June 2017 provides for treating land cost to be one-third of the value if:
    “involving transfer of property in land or undivided share of land, as the case may be……”
    In my opinion, property in the land of whatsoever nature is proportionately transferred to the buyer in leased land too. Therefore the benefit of cost of land must be available.

Leave a Reply

Your email address will not be published. Required fields are marked *