GST on construction service

[V Rajalakshmi]

An individual engages the builder to construct 6 flats on his land and proposes to sell 3 flats before the completion of the construction. The query is what is the tax rate to be adopted by the individual for the proposed sale of a flat? Whether 5% on the whole consideration or 18% on the construction value and avail an ITC charged by the builder to the seller.

AI Summary

GST Rate for Selling Flats: 5% on Total Sale Without ITC Post-April 2019; RCM Query for Unsold Flats An individual inquires about the applicable GST rate for selling three out of six flats under construction on their land. The question is whether to apply a 5% GST on the entire sale consideration or 18% on the construction value with input tax credit (ITC) from the builder. Amit Agrawal and Shilpi Jain both suggest a 5% GST rate on the whole consideration without ITC, assuming the transaction occurs after April 1, 2019. The individual also asks if reverse charge mechanism (RCM) applies to the three flats not intended for sale.