Is GST applicable for Ready to move Flat?

From April 1, 2019 Government has reduced /cut GST rates to make it more easy for home buyers but it was for under construction properties or ready to move-in flats where completion certificates have not been issued at the time of sale. However, for ready to move flats where completion certificate has been issued, GST is not applicable.

If you are buying a ready to move flat whose OC has been received then you will be getting several benefits like:
1. No risk of delay in possession as OCs of these flats has already been received.
2. GST benefits
3. Tax benefit

So you can see that GST benefit is one of the benefit to the home buyers which make it convenient and attractive to buy a ready-to -move-in flat.

Tax rates on a property are charged under Work Contracts. But a ready-to-move-in flat/property (where completion certificate/ Occupancy Certificate(OC) has been issued) is out of the purview of work contracts. That's why GST is not applicable to these projects.

Please go through the link : https://www.cbic.gov.in/resources//htdocs-cbec/gst/GST_on_comercial_properties.pdf;jsessionid=D2F4F072046E1AE7A9DD838EB3D30C1A

You can convince the builder by telling these points and showing the document.
I hope it will help

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GST is not applicable on ready-to-move flats. It is applicable to under construction properties. That means flats which construction is completed and occupancy certificate is received.
If he is insisting customer to pay GST, then that means the construction is no in a ready-to-move status. He would not have got the necessary Occupancy certificate.
An under construction flat normally will be lesser costing than a ready-to-move flat. You can also compare the current market price of similar construction nearby and also discreetly enquire with other buyers too.

You may first have an upper limit in mind for yourself by comparing the market price, the amenities in the flat, other facilities nearby ,your requirements or urgency etc. Then ensure that there is no illegality or lack of necessary statutory clearances. Ask and get clarification about OC and numbering etc. From that you will now whether it actually ready-to-move status.

If OC is not received even though flat appears to be fully constructed, then ascertain whether there is any problem. Take appropriate measures to protect your interests. If there is no illegality and only procedural delay, then you have two options. Buying a under construction flat at lower cost and paying GST or wait till OC is obtained and pay a higher price but no GST.

This you have to work out and decide considering more factors as given above. In case you pay GST ensure that you do it properly with all records and that mentioned in the sale deed too.

As per the existing GST rules one need not to pay any GST on buying a flat which is ready to move in. Many people are not aware of this fact and some real state agents would tell it only in the end when one asks clarification about it. What happens during the construction of the flat that the builder will be using many services and input material for which he will be paying GST and Govt has made a provision of the input tax credit (ITC) and as per that the input GST can be subtracted from the final GST on the products. So the builder has already paid the GST to Govt after availing ITC benefits. In a completed flat there is no such construction or material aspect is remaining pending and hence there is no GST on it.

GST is already being paid on various construction and buying activities like Under-construction home bought under the PMAY Credit-Linked Subsidy Scheme (CLSS), Under-construction home bought without the subsidy, and Works contract for affordable housing and other such activities. The range of tax for these are 8 to 12%.

For the incomplete or under construction properties the GST rates are 8 to 12% where ITC benefit is availed and are 1 to 5% where ITC is not availed.

If the apartment is a ready-to-move apartment, that will not have any GST. But the developer will get input credits on construction costs. But the builder may charge premium charges as you need not pay any GST.
The applicable GST has been reduced to under-construction apartments and houses also from 12 % to 5%. The apartments which are ready to occupy will have other advantages also like there will not be any delay in occupying the house. There will not be any uncertainty in understanding the quality of construction and also to know about the occupation. You can occupy immediately and rent it out to anybody so that you need not worry about EMI payment. No GST is applicable and you can avail the tax benefits while you calculate income tax also.

GST is not applicable on ready to move in flats as a complete flat is a final product on which GST is already included in its input services and products used for construction.

Although GST is applicable on an under construction flat or apartment. The rate of GST is 5% which is reduced from 12% to reduce the overall cost and promote buying by middle class.

The builder cannot charge GST on the cost of flat but he can charge GST on other charges which is applicable at the time of final payment. For example, builder charges for electrical meter connection, IFMS, external and internal wiring, electricity load, club charges, advance maintenance, etc. There maybe more than the above-mentioned heads of charges claimed by builders from buyers at the time of final possession.

You can check the final breakup of heads on which GST is charged and at what rate. The rate of GET on flat coat will only be 5% which is already inclusive so inky breakup of same will be given, while in other heads of charges the rate of GST will be different and can be 12% or even 18%.

Rate of GST is uniform throughout India so the rate of GST for Hyderabad will also be same as is for any other city.

Before you negotiate with builder, do check the heads of charges in which GST is charged and at what rate.

The new GST rates in the real estate industry will be effective from 1 April. As per the provision, GST has to pay on under construction flat or apartment. No need to pay GST for ready to move flat as it is already included at the time of construction work.
However, under GST a single rate of 12% is applicable on under construction properties. Recently,the GST Council has reduced the tax rates to 5% from 12% on premium houses and, 1% from 8% for affordable houses where completion certificate is not issued at the time of sale. You will not get ITC benefit under the new tax rate policy.
There is no change in GST rate in all over India.

With the introduction of GST regime, the developers may escalate the price due to compliance of the same during the construction phase. However, GST regime can offer numerous advantages while purchasing a flat.
If you look into the crisil report, a developer has to pay excise tax apart from VAT on inputs of raw materials such as cement and steel at the rate of 28 percent and 18 percent respectively varying from state to state. However, the end product - the ready to move apartment would bear a tax not exceeding 12 percent and hence it would be a profitable proposition for the buyers.
Hence it is always a profitable venture to have a ready to move a flat offering the buyers to save 12 percent GST on their purchase.

Customers who buy ready-to-move flats have to pay a relatively high price for this. Under the GST, the property will be given to the purchaser at a lower tax in the form of lower prices or installments. Goods and service tax, which is applicable in the country, will benefit the customers who invest in under-construction properties instead of ready-to-move houses under the One Nation One Tax system.
The first 18 percent GST rate has been fixed on under-construction properties. But such properties will be taxed at 12 percent. But people whose property is being used for commercial use or industry and their annual income is more than 20 lakh rupees, have to pay 18 percent tax.
Before the coming of GST, many tax builders had to pay, they are Value Added Tax (VAT), Central Excise, Entry Tax, Service Tax, etc. The cost that the builders incurred on these taxes was transferred to the property buyers. But later everyone got a single tax GST.
On an updated basis, 60 sqm area in many metros and 90 sqm area in the non-metro city and flats priced up to about 45 lakh rupees will add 1% percent GST. At the same time, 5% percent GST will have to be given to flats with more area and higher prices.
Till some time ago, the Union Government has reduced the GST rates for real estate and after this, there was no hope of reducing it again in this sector. But at a time when after the coronavirus epidemic economic crisis started to surround it, due to this, the sale of houses has come down.