1. Impact of gst on real estate
CA Manmohan Mahipal
M Mahipal & Company
Source- IDTC-ICAI

2. Real Estate Sector in india
In India, real estate is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade.
The real estate sector comprises four sub sectors - housing, retail, hospitality, and commercial.
The housing sector alone contributes 5-6 per cent to the country's GDP. The real estate stimulate demand for more than 250 ancillary industries.

3. Current tax structure on real estate
At the time of any real estate transaction, there are several taxes on sale of property.
Some of these taxes on sale of property are to be borne by the Buyer and some are borne by the Seller.
Moreover, there are some taxes on sale of property which are levied country wide and there are some taxes on sale of property which are levied on specific states only.

4. SERVICE TAX ON SALE OF PROPERTY
If the property that is being sold is an under construction property, Service Tax would also be required to be paid on such property.
This Service Tax component is only required to be paid if the property is under construction and not in case of fully constructed properties.
The effective rate of Service Tax on property is 4.5% ( Service Tax including KKC+SBC) depending on the size of the property and the transaction value.
Service Tax on sale of property is required to be paid by all taxpayers irrespective of the state in which the property is situated. This Service Tax is required to be paid by the Buyer to the Seller who in turn deposits it with the Govt.

5. VAT ON PROPERTY
As VAT is a state level subject, some states levy VAT on sale of under construction property and some states don’t levy any VAT on sale of under construction property.
VAT is required to be paid by the Buyer to the Seller who in turn deposits it with the Govt.

6. STAMP DUTY ON PROPERTY
At the time of transfer of title of property and registration with the Govt, stamp duty is required to be paid on property. The rate of stamp duty differs from state to state.
Some states also give a concession in case the new owner of property is a female.

7. Real Estate under GST Sr. No. Nature of Service Rate of GST 19
Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly.
[The value of land is included in the amount charged from the service recipient]
With Full ITC but no refund of overflow of ITC 27
Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act
18%
With Full ITC

8. Real Estate under GST – other factors
HSN
Goods description
Rate
[2523]
Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers
28%
2516
Marble and travertine blocks
Granite blocks
12%
[ , ]
[2516]
Marble and travertine,
other than blocks
Granite, other than blocks
7324
Sanitary ware and parts thereof of iron and steel 73
7303 Tubes, pipes and hollow profiles, of cast iron.
Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel.
Other tubes and pipes
18%

9. Thank You
CA Manmohan Mahipal M Mahipal & Company Chartered Accountants Mobile
Source- IDTC-ICAI