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  • Category: Central Government

    Query on passing on benefit of GST for home buyers:


    Do you have a query about GST and its impact on house purchase? Look at this ISC page to learn more from our experts.

    I came to know that there is a Government note issued recently that builders have to pass on the reduced GST back to the home buyers/customers. I would like to know what is the present reduced % of GST? In pre-GST era, I paid Service Taxes for Sales considerations/water and electricity charges/Floor rise charges/infrastructure and amenities charges/ parking charges etc, at different rates, and additionally, I paid 18% GST in post GST era. This is really unjustifiable. If you think logically, the difference between the service tax paid and GST paid will be reimbursable.

    If you purchase a fully constructed house, after issuance of completion certificate no GST is to be paid. Is that true?
    I request, tax experts to answer my query.
  • Answers

    1 Answers found.
  • It is very true that in a completed project where occupation certificate (OC) is already issued, GST will not be applicable.

    In other cases, it is a bit complicated because the changeover date that is from service tax regime to GST regime is on 1st July 2017 and there will be no input GST deductions to the builder on the material purchased before 1st July 2017.

    So builder will not able to pass it on to the customer.

    Practically, if the builder is honest, he will pass on the benefits directly or indirectly to the buyer.

    Generally a buyer will be paying in installments over a period of 2-3 years and as by that time OC will not be there, he will have to pay the applicable GST.

    Due to these ambiguities, the Govt is now considering to reduce the GST down to about 5% on housing units which are under construction to give relief to the buyer.

    Knowledge is power.


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