GST RATE ON CONSTRUCTION SERVICE

[Mehul Pandya]

DEAR SIR,

A REAL ESTATE DEVELOPER IS PROVIDING CONSTRUCTION SERVICE OF RESIDENTIAL HOUSES. LAND VALUE IS NOT INCLUDED. SINCE JULY-17 HE IS PAYING 18% GST ON VALUE. SOME BUYERS ARE ALSO GETTING SUBSIDY UNDER PRADHAN MANTRI AWAS YOJANA AS PER THEIR ELIGIBILITY. NOW CONFUSION IS REGARDING GST RATE BETWEEN 18% OR 12%.

PL. GUIDE....

[KASTURI SETHI]

GST Rate is 18% if land value included. GST Rate is 12% if land value not included. Notification No.11/17-CT (Rate) dated 28.6.17as amended (Serial No.3 (if) refers.)

Concessional Rate for Pradhan Mantri Awas Yojana

8% without land value and 12 % including land value. Notification No.11/17-CT(Rate) dated 28.6.17 as amended. (Serial no.3 (ie) refers.

[KASTURI SETHI]

ITC is available in both situations.

AI Summary

GST rate on construction services varies by inclusion of land; concessional PMAY rates apply and ITC remains available. GST on construction services depends on whether land value is included: supplies including land attract a higher GST rate, while construction services excluding land attract a lower rate. Under the Pradhan Mantri Awas Yojana concessional scheme, a reduced rate applies where land value is excluded and a higher concessional rate applies where land value is included. Input tax credit is available in both standard and concessional situations.