GST on under construction building


I am going to purchase a new flat in a residential building which is under construction since last 2 yrs. The construction of the building will be completed in Dec-2017. Along with that the builder will get BU permission & the flats will be ready-to-move-in.

My questions are:

  1. If I do the payment (full/partial) before the building gets BU permission, will it attract GST?
  2. What is advisable to me: should I do the payment before BU permission or after that?
  3. If GST is applicable, how much would it be & who should pay it – builder or me?


Asked on September 21, 2017 in Real Estate.
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1 Answer(s)

Under GST, a supply shall be treated as taking place at the earlier of when an invoice is issued or when payment is received. GST is not applicable on sale of a plot of land or an apartment. So, a flat under construction is neither a plot of land or a building, and hence, an effective 12% GST may not pose such a problem. Sale of under construction flats are treated as supply under GST. So GST is chargeable on partial payment made.  Also ready to move flats will attract GST and that will be payable by the buyer to the seller.

Answered on September 27, 2017.
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