GST will be levied on sale of land for which primary amenities - such as drainage, waterline and electricity - have been provided by real estate developer, the Authority for Advance Ruling (AAR) has said. The AAR has also concluded that sale of developed plots will be covered under the clause 'construction of a complex intended for sale to a buyer' and accordingly GST would be levied.
GST on sale of plot for which last installment to developer is pending
I have paid 2 installment to the developer. 1 installment is still due. I want to sell this plot now. I am told gst will be applicable as I am selling the right to own a plot and not the plot. Sale of rights attracts GST. I am not the owner as yet. I am not in business of property buying/selling. Pls advise Thank you
Asked 2 years ago in Taxation
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7 Answers
The clarity I need is that since I am not the owner as yet. Will I have to pay GST as I'm selling my right to own a property. I was told you will be liable to pay gst on sale of rights to own land as you are not owner as yet. The property is for 50L.
Asked 2 years ago
As per the government rules, you need to pay GST only for under construction and new properties.
The standard GST on under construction property is 18%, but it varies for different segments. Affordable housing has a 1% GST rate, while other parts have a 5%, while buyers in the cheap housing segment (homes with carpet areas of up to 60 sqm) pay 8% GST.
GST is a mandatory tax levied by the government and cannot be avoided
GST on resale flat is 12% in case it is under construction. However, GST doesn’t apply to the resale of an old property or the sale of a completed property (where a completion certificate has been issued).
From April 2019, the GST Council cut the tax rates from 12% to 5% on residential properties and from 8% to 1% for the affordable housing segment. However, no ITC benefits would be available under the new tax rate policy.
The sale of land is outside scope of GST as per entry 5 in Schedule III of CGST Act.
2)sale of accrued right. This sale cannot be termed to be sale of land.
Therefore, it will be taxable supply as Service.
However, if the above transaction in not a regular activity of querist, but only one of transaction as investment etc., a stand can be taken that it is not in course of ‘business’ and hence liability will not attract.
I do appear in High Court, it for you to decide whom to engage. All this is jargon gymnastics “selling the right to own a plot”. The law is, under Schedule III mentioned in Section 7 (2) (a) of CGST, 2017, sale of land and building is kept outside the scope of GST., that is buyer is not liable to pay any GST. It an attempt at cheating.
Dear client,
As per the government rules, you need to pay GST only for under construction and new properties.
The standard GST on under construction property is 18%, but it varies for different segments. Affordable housing has a 1% GST rate, while other parts have a 5%, while buyers in the cheap housing segment (homes with carpet areas of up to 60 sqm) pay 8% GST.
GST is a mandatory tax levied by the government and cannot be avoided.
I gst is applicable for sale rights
