GST Rate for Under Construction Property - Updated 2026 Slab & HSN Details

Understanding GST on Under Construction Property in India

In India, the Goods and Services Tax (GST) has been a game-changer for the real estate sector, particularly for under construction properties. As of the effective date of July 1, 2017, the GST rate for under construction properties is 18% (effective rate 12% after 1/3rd deduction towards land value). The HSN/SAC code for these services is 9954.

The GST rate and HSN/SAC code are crucial for developers, buyers, and tax professionals to understand the tax implications of under construction properties. The following table provides a brief description of the goods/services, applicable GST percentage slab, relevant HSN/SAC code, and effective date of rate:

Calculator Widget

To calculate the total GST amount for an under construction property, you can use our calculator widget. Simply input the base price of the property, and the widget will calculate the total GST amount.

Detailed Tax Breakdown: Composition vs Regular

The GST tax structure for under construction properties can be complex, with different tax implications depending on whether the developer opts for the composition scheme or the regular scheme. The composition scheme is available for developers with an annual turnover of up to ₹1 crore, while the regular scheme is applicable for developers with an annual turnover exceeding ₹1 crore.

The following table provides a comparison of the tax implications under the composition scheme and the regular scheme:

Comparison with Pre-GST Tax Regime

Prior to the introduction of GST, the tax regime for under construction properties was complex, with multiple taxes levied by the central and state governments. The pre-GST tax regime included service tax, value-added tax (VAT), and stamp duty, among others.

The following table provides a comparison of the pre-GST tax regime and the GST tax regime for under construction properties:

Frequently Asked Questions (FAQs)

Input Tax Credit (ITC) and Compliance

The following FAQs address common queries related to ITC and compliance for under construction properties:

• Q: Can developers claim ITC on input services and goods under the composition scheme? A: No, developers cannot claim ITC under the composition scheme.
• Q: What are the compliance requirements for developers under the regular scheme? A: Developers must file monthly/quarterly returns and maintain detailed records of input services and goods.
• Q: Can buyers claim ITC on the GST paid on under construction properties? A: No, buyers cannot claim ITC on the GST paid on under construction properties.

Compliance Tips

To avoid common billing mistakes and ensure compliance with GST regulations, developers and buyers should:

1. Maintain accurate records of input services and goods
2. File returns on time to avoid penalties and interest
3. Ensure correct calculation of GST and ITC
4. Obtain necessary documents, such as invoices and receipts, from suppliers and service providers

Conclusion

In conclusion, the GST tax regime for under construction properties in India is complex, with different tax implications depending on the scheme opted by the developer. It is essential for developers, buyers, and tax professionals to understand the tax implications, compliance requirements, and ITC provisions to avoid common billing mistakes and ensure compliance with GST regulations.