GST on Purchases made from unregistered persons.

[Rajesh Kumar]

Sir/Madam

Please inform whether at least 80% is necessarily required to purchase from registered persons by a builder/ developer even if he sales his flats/ buildings after receiving of completion certificate when he is not required to pay GST. In this case, if he purchases more than 20% from unregistered persons, is he required to pay under RCM for differences even after sale after completion certificate?

AI Summary

Builders Must Meet 80% Purchase Requirement from Registered Suppliers Under GST Until Completion Certificate Issued A query was raised regarding the requirement for builders or developers to purchase at least 80% of inputs from registered suppliers under GST regulations, even after receiving a completion certificate (CC) for their projects. Respondents clarified that this 80% condition applies only until the issuance of the CC or first occupation. After receiving the CC, the sale of buildings is neither considered a supply of goods nor services under GST, thus the notification does not apply. If purchases from registered suppliers fall short before the CC, reverse charge mechanism (RCM) applies for the shortfall.