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.

[Amit Agrawal]

GST @ 5% is payable on whole consideration for the flat, without any ITC.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Shilpi Jain]

Assuming this transaction is on or after 01.04.2019 - 5% will be applicable for the residential flat

[V Rajalakshmi]

Thank You Amit Agrawal JI and Shilpi Jain Ji for the prompt reply. Another follow-up question is whether RCM will be applicable for the 3 flats which are not intended for sale.

AI Summary

GST rate for residential flat without input tax credit applies to whole consideration on pre completion sales under advisory view.
For a residential flat sold before completion, the applicable GST is the reduced rate applied to the whole consideration with no entitlement to input tax credit; this represents non binding advisory views, and a further question remains whether reverse charge applies to the unsold flats.