A Quick Guide about GST for Real Estate

About Goods and Services Tax (GST)

GST is an Indirect Tax that will be used instead of many other Indirect Taxes in India. The Goods and Service Tax Act was passed in the Indian Parliament on 29th March 2017. The Act came into effect on 1st July 2017. Goods &Services Tax Law in India is a detailed, multi-stage, destination-based tax that is placed as taxation on every value addition.

To put it simply, a good GST definition is:

Goods and Service Tax (GST) is an indirect tax that is levied on the supply of goods and services. This law has replaced many indirect tax laws that were previously being used in India. GST is the single indirect tax for the entire country.

Under the GST method, the tax is levied at every point of sale. In the case of intra-state sales, both Central GST and State GST are charged. Inter-state sales are chargeable as Integrated GST. Read on to find out more…

GST India Guide

The idea to implement GST at home in India began in the year 2000 when a committee was set up to draft the law for taxation of good and services using GST. It took 17 years from that time for the Law to evolve and develop. In 2017 the Lok Sabha and Rajya Sabha both passed the new GST bill and subsequently the GST Law came into force on 1st July 2017.

GST – the Advantages

There is much talk about whether the GST impact is a good one or not. Well, the key point is that GST has mainly removed the cascading effect on the sale of goods and services. This has in turn impacted the cost of goods. Since the GST methodsremoves any tax on tax, the cost of goods decreases. Also, it is technology that mainly drives GST so that it fits right into the digital age we are living in. All activities like registration, return filing, application for refund and response to notice must be done online on the GST Portal and this makes the process fast and efficient.

  1. Higher threshold for registration
  2. Online Simpler Procedure under GST
  3. Defined Treatment for e commerce
  4. Regulating the unoragnized sector
  5. Removing cascading tax effect
  6. Lesser Compliances
  7. Regulating the unuragnized sector


GST’s Components

The new GST rules have three taxes that apply:

CGST: The Central Government collects this tax on an intra-state sale (For example, a transaction happening in West Bengal)

SGST: The State Government collects this tax on an intra-state sale (For example: transaction happening within West Bengal

IGST: The Central Government collects this tax for an inter-state sale (For example, West Bengal to Assam)

How is GST applied?

GST is levied on the place of consumption of goods and services. It can be levied upon the following:

  • Import of goods and services
  • Intra-state supply and consumption of goods and services
  • Inter-state movement of goods

The taxis comprehensively levied on manufacture, sale, and consumption of goods and services at a national level. It is one of the biggest taxation reforms implemented in this country, and its aim is to integrate state economies and boost overall national growth with a uniform GST tax rate.

The system will transform from the current production-based taxation to being a consumption-based one. Apart from bringing some sort of uniformity in taxes across states, GST is expected to increase efficiency and system compliance.

The implementation of the GST new rates in India will impactlong term inflation as the price of goods and services will not be as much as it was before GST.


How Get GST Certificate?

Any real estate business or others whose turnover is more than 20 lakh INR must register for Goods and Service Tax, that is, GST on real estate. Also, some special businesses are mandated to register for GST on property as well. Every registered taxpayer is given aGST Registration Certificate issued in Form GST REG-06. It is also possible to download the certificate from the GST portal, only if you are a registered taxpayer. The Government of India does not issue any physical certificate, so the online version is all you get. You must save it on your system or take a printout for later reference.

The Latest News from CBIC

The CBIC has said that GST registration is not required if annual turnover is less than 40 lakhsiNR only in case of a supplier of goods. There are exceptions though, as follows:

  • Any cases of compulsory registration of GST for flats or otherwise
  • Edible ice, pan masala, icecream, tobacco and its substitutes
  • Businesses making sales within the states of Arunachal Pradesh,Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand
  • Selecting voluntary registration

These rules will be effective from 1st April 2019.

How to Download GST Registration Certificate

To download GST construction and other GST registration certificate, you need access to your GST account. Once you have all the details of your GST account, follow the steps listed here:

Step #1:

Go to your Internet browser and open the GST India portal:https://www.gst.gov.in/

Step #2:

Click Login. The login page is displayed with user name and password fields.

Step #3:

Enter your ‘Username’ and ‘Password’ credentials as well as the captcha in the required fields and click ‘LOGIN’. The portal home page is displayed.

Step #4:

Go to Services > User Services >View/ Download Certificate.

Step #5:

Click ‘Download’ to download the certificate to your computer. The certificate contains all the details on the tax transactions.

Does your GST certificate expire?

GST registration certificate for GST real estate India or any other business that has been issued to any casual taxable person or NRI taxable person will remain for ninety days from the date of registration or for a period specified in the application of the registration, whichever comes first. The proper authority has the power to extend this validity period beyond ninety days, as specified in Section 27(1) of GST for flats and other businesses.

However, it is important to note that GST registration certificate issued to any other person remains valid until or unless the certificate is cancelled or surrendered by the taxpayer himself or herself.

Amendments of Changes to GST on Real Estate India and Others Certificate

If there are any errors or mistakes in the GST certificate they can be amended or rectified by the taxpayers themselves. The amendments of the GST registration certificate are divided into two sections.

Core Fields

Amendment of core fields: the core field includes the following:

• Name of the GST construction business

• Inclusion or exclusion of the stakeholder

• Main place of business or additional place of business

Non-Core Fields

Amendment of non-core fields includes any other fields that are not mentioned as core fields.

Now that you know a little more about how to get the registration certificate for GST on real estate sector and other businesses, delay no more but get your certificate as soon as possible!

GST for Real Estate

The real estate industry is one of the most important parts of the Indian economy. It contributes somewhere between 6-8% to India’s Gross Domestic Product (GDP), and it comes only second after the IT industry in terms of generation of employment for people

The advent of GST on a property coming into the picture has led to indirect taxation in this sector being totally revamped.

The 33rd GST Council Meeting

At the 33rd GST Council Meeting held on 24th February 2019, new GST on construction rates has been introduced for residential real estate. These rates will come into effect from the 1st of April 2019. The new GST rates for residential real estate transactions have been proposed as follows:

  • GST is to be charged at 5% without Input Tax Credit (ITC) on residential properties that are not part of the affordable housing segment.
  • GST is to be charged at 1% without ITC on residential properties that are included in the affordable housing segment.
  • GST on real estate for under construction properties is 12%.
  • GST does not apply to the sale of completed properties (where completion certificate has already been issued) or to the resale of old properties.
  • Builders receive input tax credit on the materials purchased from suppliers/contractors and under the current GST structure, were expected to pass it on to home buyers. However, this has yet not happened. This may lead to changes in the structure of GST property tax in the future.

The Impact of GST on Real Estate

When GST on real estate was first implemented in July 2017, the entire real estate industry going through a downward slump attributed mainly to demonetization and Real Estate Regulation and Development Act, 2016 (RERA) implementation.

However, in early 2018, the demand and supply for real estate had an upward spike mainly driven by a strong growth in affordable and mid-income housing. But, property prices were either the same or has just a nominal rise across the country while in larger cities such as Delhi NCR prices, were reported to have had a 2% decline in the third quarter of 2018 (Source: Report byLiasesForas).

Such price declines, however, were mainly a result of over supply rather than the impact of GST on housing, as in most cases, input tax credit (ITC) benefits were not passed on to the home buyer by the real estate developers. Even in cases where ITC benefits were passed on to homebuyers, the change in prices was not significant.

The resale market was also majorly impacted with prices reportedly sinking by 15% to 20% in Delhi NCR as specified in theLiasesForas report. This was despite GST not being applicable to resale properties. So you can conclude that the impact of GST cannot be accurately measuredyet and only with more time will a clearer picture emerge.

You may now have a better understanding of GST benefits for real estate, and you can act accordingly if you are in the business. We wait to see what happens in 2019.

Aadil Saif

I am Adil Saif working with AddressOfChoice Realty Private Limited as a Digital Marketing Expert. I have 8 Year Experience in same field. I love to share blog and Article.