New Delhi: In what could bring cheers to home buyers, the government has said that if they purchase the fully constructed property after the issue of completion certificate, they will not have to pay Goods and Services Tax (GST).
“It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/building and ready to move-in flats where sale takes place after issue of completion certificate by the competent authority,” a Finance Ministry release said.
The ministry clarified that GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale.
The government further said that housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of State Government etc will attract GST of 8 percent.
“For such projects, after offsetting input tax credit, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST,” it added.
For projects other than affordable segment, it is expected that the cost of the complex/ buildings/ flats would not have gone up due to implementation of GST. Builders are also required to pass on the benefits of lower tax burden to the buyers of property by way of reduced prices/ installments, where effective tax rate has been down, the Finance Ministry said.