The Office of Chief Commissioner of State Tax, Gujarat on May 05, 2026, issued FAQs on Real Estate Sector.
The Government of India issued FAQs in May 2019 to clarify GST rates applicable to the real estate sector. These FAQs are meant for guidance and ease of understanding for stakeholders, especially homebuyers, but they do not have legal force. In case of any discrepancy, official gazette notifications prevail.
1. GST on Residential Property
• Ready-to-move-in flats (Completion Certificate issued): No GST is applicable if the certificate is issued before sale. However, GST applies if any payment is made before the certificate is issued.
• Affordable housing: GST reduced from 8% (with ITC) to 1% (without ITC). Applicable for units within specified size limits (60 sqm in metros, 90 sqm elsewhere) and value up to ₹45 lakhs.
• Other residential units (non-affordable): GST reduced from 12% (with ITC) to 5% (without ITC) for under-construction properties.
• Resale of residential property: No GST, as it is treated as sale of immovable property.
2. GST on Commercial Property
• Completed commercial property: No GST if Completion Certificate is issued before sale (same rule as residential).
• Commercial units in Residential Real Estate Projects (RREP): GST reduced from 12% (with ITC) to 5% (without ITC), provided commercial area is ≤15% of total project area.
• Commercial units in other projects (REP): GST remains 12%, with proportionate ITC allowed.
• Resale of commercial property: No GST applicable.
3. Refund on Cancellation of Booking
• If cancellation occurs within the time allowed for issuing a credit note, the builder can refund GST directly to the buyer.
• If this period has expired, the homebuyer must claim a refund as per prescribed GST procedures (Circular dated December 27, 2022).
4. Liability to Pay GST
• The promoter/builder is responsible for collecting and depositing GST on payments received from buyers.
• No GST liability arises if the first payment is received after issuance of Completion/Occupancy Certificate.
Overall, the revised GST regime simplifies taxation, reduces rates for homebuyers, and removes Input Tax Credit (ITC) benefits in exchange for lower tax rates.
[Notification No. CCT/Legal/FAQ/2026]
