In the 47th GST council meeting, the government increased the GST to 18% for the majority types of construction services. Other types of services fall under the slabs of 5% and 12%.
Real estate as well as the infrastructure development segment contributes to the overall construction industry of India.
This article is a comprehensive guide on GST rates on construction services in 2022.
Here’s the list of GST rate list of construction services.
What is the rate of GST on services?
In the same 4-tier tax structure as goods, services are also subject to GST.
However, healthcare and educational services are exempted from the purview of the GST by government.
What is the GST rate on bricks?
GST of 12% is charged on brick manufacturing and trading.
Earlier, a GST of 5% was charged to a registered person involved in the manufacturing & trading of bricks.
Is there a GST for construction?
Yes, GST on construction services is 18%. However, this GST rate varies in the construction sector as:-
|For affordable housing; it is 1%|
|Building stones: 5%|
|Steel and Iron: 18%|
|No GST (0%) is applicable on completed or ready-to-sale properties only if the Completion Certificate (CC) has been issued.|
|Home buyers in India have to pay a GST on the purchase of under-construction properties like flats, apartments, and bungalows, at the rate of 1% for affordable housing and 5% for non-affordable housing.|
|Under construction properties: 12%|
|GST is also applicable to the purchase of developable plots in real estate.|
Is GST applicable on builder floor?
Yes, GST is applicable on the builder’s floor. On under-construction properties, a GST of 12% is applied. On completed, ready-to-sell properties, GST is not applicable unless a Completion Certificate (CC) is present. GST is also levied on construction contracts.
Is GST applicable on plywood?
Yes, GST is applicable on plywood.
- Wood and Wooden Products attracting 28% GST
- Plywood, veneered panels, and similar laminated wood attract 28% GST
What is GST on RMC?
Construction materials include cement, which is taxed at 28% under GST. Before the GST, concrete mix and ready-made concrete mix were taxed differently.
RMC was taxable, but the concrete mix was exempt.
Is GST paid by the buyer or seller?
Buyer is liable to pay GST at the time of purchasing the product or availing of the service.
Under Section 15 of the CGST Act of 2017, if a transaction exceeds 2.5 lakhs, it is subject to both GST and income tax.
Additionally, both deductions must be made at 2%.
How do I avoid GST on construction property?
As soon as the builder receives the completion certificate for the property, it is referred to as ready-to-move-in property.
Therefore, such assets are not subject to GST. Buyers who pay the full cost of the property after the GST implementation, i.e. July 1, 2017, are responsible for GST.
Can a builder charge GST on maintenance?
Yes, GST is applicable to maintenance charges.
A supplier who makes taxable supplies of goods or services or both from a state or union territory must register under GST if his aggregate turnover in the applicable fiscal year exceeds a threshold amount.
Can the builder claim a GST refund?
GST cannot be claimed back if under construction property is purchased. However, there is no GST if you purchase the property after being completed. In this case, the timing of registration is irrelevant.
Who pays GST on the under-construction property?
Buyers of under-construction properties in India are required to pay GST at a rate of 1% for affordable housing and 5% for non-affordable housing when purchasing under-construction properties.
GST is also applicable to the purchase of developable plots in real estate.
Non-affordable housing: 12% with ITC
Affordable housing: 8% with ITC
Frequently Asked Questions(FAQs):-
What is the GST rate on cement?
Cement will attract 28% GST which has resulted in increased costs for the infrastructure sector. And GST of 18% is charged on refractory cement, mortars, and concretes (mainly used for building industry furnaces, huge ovens, etc.).
What is GST in tiles?
Roofing tiles and earthen tiles are subject to 5% GST. Tiles and flags made of glazed ceramics are subject to GST at 28%.
Can we claim GST on tiles?
Yes, you can claim GST on tiles.
18% GST is charged on refractory bricks, blocks, tiles, and similar refractory ceramic constructional goods, other than those of siliceous fossil meals or similar siliceous earth.
How do you calculate GST on a builder?
Generally, the GST rate on construction services is 18%..
We hope this article on GST rates on construction services helped you to understand the rates applicable to construction services.
Furthermore, you can reach out to us in case of any queries.