Tax and duty
GST on an under-construction home
Two schedules to one Act decide whether this tax touches your purchase at all — and they are far more useful to you than the rate, because they have not changed while the rate has. This page sets out what the Act says, names the body that publishes the current figure, and explains why the base is not the value the registration department publishes.
There is no rate on this page
The rate on this supply is fixed by a notification issued under the charging section, and it has been amended since the tax began. The Central Board of Indirect Taxes and Customs publishes those notifications, and that is where the operative figure belongs — not here, where nothing can tell you the day it stopped being right.
Last reviewed . Nothing here is tax advice, and none of it is specific to your agreement.
What this page answers
The prior question
Whether the tax applies at all
Two schedules to the Central Goods and Services Tax Act, 2017 settle this, and they are the stable half of the subject. Read these before you go looking for a percentage.
Land is outside the tax
The sale of land is neither a supply of goods nor a supply of services under Schedule III to the Act. A plot purchase is therefore not a taxable supply. What is billed alongside a plot, and how those charges are characterised, is a separate question with its own answer.
A finished building is outside it too
Schedule II treats construction of a building intended for sale as a supply of services — except where the entire consideration is received after the completion certificate is issued by the competent authority, where one is required, or after first occupation, whichever is earlier. Outside that exception, the sale of a building sits in Schedule III with land.
A home bought while it is being built is inside it
That is the case the exception is written against, and it is the ordinary case for a home bought off plan. The promoter is supplying construction services to you over the life of the payment schedule, and the tax attaches to each of those supplies rather than to a single sale at the end.
Those three cards are a summary of two provisions, not a substitute for them. The provisions themselves — with what each one does — are set out under “what the figure is charged on” below, and the bare Act is on India Code.
The position
Why this page prints no figure
The rate on this supply has moved. The schedules that decide whether it applies have not. Publishing the first and skipping the second is how a page becomes confidently useless.
Every figure on this subject is set by a notification, a rule, a schedule or a Finance Act, and each of those is amended without warning you. The duty on a conveyance, the registration fee, the rate on an under-construction home, the rate and threshold a buyer withholds under section 194-IA — none of them is a fact about the world. Each is a fact about what somebody published last.
A web page that prints one of those numbers is a snapshot with no expiry date on it. It cannot know when the notification changed, so it goes on stating the old figure with exactly the confidence it had on the day it was written — to you, and to the answer engines that quote it. That is what happens to every page in this subject that prints a rate, including the ones that were right when they were published.
So these pages print none. What they give you instead is the part that does not go stale: which authority sets the figure, where that authority publishes the current one, what the figure is charged on, who owes it, when it falls due, and which document proves it was paid. Take the number from the authority. Take the structure from here.
What is not on this page
- No stamp duty percentage, for either state.
- No registration fee percentage, for either state.
- No GST rate, and no deemed value fraction from the rate notification.
- No guidance value and no guideline value — not a figure, not a range, not an example.
- No rate, threshold or penalty amount under section 194-IA.
- No rupees per square foot, and no worked total that would imply one.
- No completion or handover date, on any project, anywhere on this site.
The two stamp-duty pages — Karnataka and Tamil Nadu — work to the same standard on a charge with an entirely different base.
A number in the body of an Act is quoted, with its section. You can check it against the bare Act in a minute, which is the same standard this site's glossary applies to statutory definitions. There are very few such numbers on these pages — the period the Registration Act, 1908 allows for presenting a document, in section 23, is the clearest of them.
A number fixed by notification, rule, schedule or Finance Act is named, not printed. Every rate on this subject is in that class. The authority that publishes the current one is named and linked instead, on every answer that would otherwise be tempted to quote it.
A section number we did not transcribe is marked, not guessed. Where the Act is certain and the section was not checked against the bare Act, the Act is cited and the section carries a visible mark. A confident-looking citation nobody verified is worse than an admitted gap, because a reader cannot tell the two apart.
Nothing here is advice, and none of it is specific to your transaction. These pages describe a general structure. What you owe depends on your document, your residence status, the parties and the property, and that is a conversation with your own advocate and your own chartered accountant — neither of whom is us.
Six questions
GST on an under-construction home
A tax on a supply of construction services, charged by the promoter on what it bills you under the agreement — and not charged at all on the sale of land, or on a building where the whole consideration is received after the completion certificate or first occupation.
- Where the current figure is publishedThe address to go to instead of trusting a number on a page like this one. If a figure matters to your decision, take it from here on the day you need it.
The Central Board of Indirect Taxes and Customs, in the rate notifications on its own site. Those notifications are amended rather than replaced, so the operative text is the original as amended — which is precisely the kind of reading a summary on somebody's blog cannot do for you.
If a promoter quotes you a rate, ask which notification it comes from. A promoter who is charging the tax correctly can answer that in one line, and the answer is checkable.
SourcesCentral Board of Indirect Taxes and Customs, Government of India — CBIC — GST notifications and circulars (opens in a new tab)Goods and Services Tax Council — GST Council (opens in a new tab)
- What the figure is charged onThe part buyers get wrong. Two homes at the same agreed price can carry different charges, because the agreed price is not always the amount the charge is computed on.
The value of the supply — in plain terms, what the promoter charges you under the agreement for the construction. It is NOT the guidance value in Karnataka or the guideline value in Tamil Nadu. Those published values drive stamp duty, and a buyer who assumes one number governs both charges has merged two entirely separate systems.
There is a second piece of the base that catches people out. Because land is not taxable, the rate notification prescribes a deemed deduction for the value of the land out of the total amount charged. The fraction is in the notification and this page does not print it — but you should know it exists, because it is why the tax on your invoice is not simply the rate applied to the whole amount you paid.
Whether the tax applies at all is a prior question, and the Act answers it in two schedules. Construction of a complex or building intended for sale to a buyer is treated as a supply of services — EXCEPT where the entire consideration has been received after the completion certificate is issued by the competent authority, where one is required, or after first occupation, whichever is earlier. And the sale of land, and the sale of a building outside that exception, is neither a supply of goods nor a supply of services at all.
Two consequences follow directly, and they matter on this corridor. A finished home bought outright after the building is complete does not carry this tax. And a plot — a sale of land — does not carry it either. What is billed alongside a plot, and how those charges are characterised, is a separate question, and the Board has issued clarifications on it that this page does not transcribe.
The Act, and the section
- Central Goods and Services Tax Act, 2017 — Schedule II, paragraph 5(b)
Treats construction of a complex or building intended for sale to a buyer as a supply of services, except where the entire consideration is received after the completion certificate is issued, where one is required, or after first occupation, whichever is earlier.
- Central Goods and Services Tax Act, 2017 — Schedule III, paragraph 5
Puts the sale of land, and — subject to Schedule II paragraph 5(b) — the sale of a building, outside the tax entirely: neither a supply of goods nor a supply of services.
What we could not establish
How development and amenity charges billed alongside a plot are characterised is a question the Central Board of Indirect Taxes and Customs has addressed by circular. This page does not transcribe the circular number or its wording, and you should not take either from a page that has not read it. Ask your chartered accountant to read the current circular against your own cost sheet.
SourcesLegislative Department, Ministry of Law and Justice, Government of India — India Code — the bare Acts (opens in a new tab)Central Board of Indirect Taxes and Customs, Government of India — CBIC — GST notifications and circulars (opens in a new tab)
- Central Goods and Services Tax Act, 2017 — Schedule II, paragraph 5(b)
- Who owes itNot always the person who hands over the money. On one of these charges the obligation sits with the buyer and almost nobody knows it, which is how a penalty arrives years later.
The promoter owes the tax to the government. You bear it, because the promoter charges it to you on the invoice — but the person liable to the exchequer under the Act is the supplier, not you.
That distinction has a practical consequence worth acting on. Money you hand a promoter as 'GST' is not GST until it is charged on a tax invoice by a registered supplier and accounted for. A demand letter is not an invoice. Ask for the tax invoice, and check the GST identification number on it against the government's own register rather than against the letterhead.
The Act, and the section
- Central Goods and Services Tax Act, 2017 — section 9
Makes the supplier liable to pay the tax on the supply.
SourcesGoods and Services Tax Network — GST common portal — Search Taxpayer (opens in a new tab)Legislative Department, Ministry of Law and Justice, Government of India — India Code — the bare Acts (opens in a new tab)
- Central Goods and Services Tax Act, 2017 — section 9
- When it falls dueLate is a different amount from on time, and on some of these it is a different document as well. The deadline runs from an event, not from your convenience.
As the promoter raises each demand under the payment schedule in your agreement, rather than in one lump at the end. The Act fixes a time of supply for services, and in a construction payment plan that generally follows the invoice or the payment, whichever comes first — which is why the tax appears on each instalment demand rather than once.
Read your agreement's payment schedule as the schedule for this tax as well. It is the document that determines when each demand is raised, and the Real Estate (Regulation and Development) Act, 2016 requires a registered project to have one.
The Act, and the section
- Central Goods and Services Tax Act, 2017 — section 13
Fixes the time of supply of services, which is what determines when the tax on an instalment falls due.
- Real Estate (Regulation and Development) Act, 2016 — section 13
Requires an agreement for sale in the prescribed form before a promoter takes more than the prescribed share of the cost, and requires the payment schedule to be in it.
SourcesLegislative Department, Ministry of Law and Justice, Government of India — India Code — the bare Acts (opens in a new tab)Central Board of Indirect Taxes and Customs, Government of India — CBIC — GST notifications and circulars (opens in a new tab)
- Central Goods and Services Tax Act, 2017 — section 13
- What proves it was paidA payment you cannot evidence later is a payment you may be asked to make again. This is the piece to keep, and the piece to ask for before you sign anything.
A tax invoice from the promoter, carrying the promoter's GST identification number and issued in the form the Act requires. That is the document — not a receipt, not a demand letter, not a line on a cost sheet.
Then verify it rather than filing it. The GST common portal has a public search that returns the registration status of any GST identification number, so a number printed on an invoice can be checked by anybody in under a minute. Keep every invoice: the tax on a home bought under construction is charged over years, and the file you assemble as you go is the only complete record of it.
The Act, and the section
- Central Goods and Services Tax Act, 2017 — section 31
Requires a registered supplier to issue a tax invoice for a supply, in the prescribed form and with the prescribed particulars.
SourcesGoods and Services Tax Network — GST common portal — Search Taxpayer (opens in a new tab)Central Board of Indirect Taxes and Customs, Government of India — CBIC — GST notifications and circulars (opens in a new tab)
- Central Goods and Services Tax Act, 2017 — section 31
The category error
Two charges, two entirely different bases
This is the part that quietly wrecks a budget, and it is not an arithmetic mistake — it is a category error, which makes it much harder to notice afterwards.
Stamp duty runs on a published value
A state department publishes a value for the property — guidance value in Karnataka, guideline value in Tamil Nadu — and the duty follows whichever is higher, that or the consideration in the instrument. The department decides the base, not the parties.
This tax runs on what you are billed
The base is the value of the supply — the amount the promoter charges under the agreement, reduced by the deemed value of the land that the rate notification prescribes. No state department is involved, and nothing the registration department publishes governs it.
So a single spreadsheet cell called “property value” cannot drive both charges. Keep them apart from the first draft, ask the promoter which amount the tax on your invoice was computed on, and ask the sub-registrar’s office what the duty will be computed on. Two questions, two different people, two different answers — and both of them checkable.
Questions people ask
Questions
Every answer below is the exact string this page publishes as structured data. There is no second version written for machines.
- Is GST charged on a ready home?
- The Central Goods and Services Tax Act, 2017 puts the sale of land and the sale of a building outside the tax, except where a building is sold as construction before it is finished. Where the entire consideration for a building is received after the completion certificate is issued by the competent authority, or after first occupation, whichever is earlier, it is not a taxable supply.
- Is GST charged on a plot?
- A sale of land is neither a supply of goods nor a supply of services under Schedule III to the Central Goods and Services Tax Act, 2017. What is billed alongside a plot, and how those charges are characterised, is a separate question, and the Central Board of Indirect Taxes and Customs has issued clarifications on it. Take that reading from your chartered accountant against your own cost sheet.
- Is GST charged on the guidance value or on the agreement value?
- On the value of the supply, which is what the promoter charges you under the agreement. The guidance value in Karnataka and the guideline value in Tamil Nadu are published for stamp purposes and drive stamp duty, not this tax. Merging the two is one of the commonest errors in a buyer's own spreadsheet.
- Who actually pays GST to the government — me or the builder?
- The promoter is the person liable to pay the tax to the government under the Central Goods and Services Tax Act, 2017. You bear the cost because the promoter charges it to you. Money handed over as tax is not tax until it is charged on a tax invoice by a registered supplier, so ask for the invoice and check the GST identification number on it against the government's own register.
Everything this page relies on
Sources, and how each was handled
Two kinds, and the difference is printed rather than smoothed over. One set was opened; the other is named so you can reach the authority, and nothing here is quoted from it.
Opened
Already in this site's own source register for the portal guides and the jurisdiction finder, and opened on the date that register records.
Department of Stamps and Registration, Government of Karnataka
Sub Registrars — office directory (opens in a new tab)igr.karnataka.gov.in
The department that administers stamp duty and registration in Karnataka, and the sub-registrar offices a document is presented at.
Department of Stamps and Registration, Government of Karnataka
Kaveri Online Services (opens in a new tab)kaveri.karnataka.gov.in
Karnataka's registration portal — where a document is registered and searched, where the office holding a village is confirmed, and where the department publishes the values and charges this page refuses to print.
Department of Stamps and Registration, Government of Karnataka
Kaveri Online Services — the older address (opens in a new tab)kaverionline.karnataka.gov.in
The address a great many guides still send you to. Our own portal walkthrough records that it did not respond from our network on the date it was checked, while the name still resolves.
Registration Department, Government of Tamil Nadu
TNREGINET — Inspector General of Registration (opens in a new tab)tnreginet.gov.in
Tamil Nadu's registration portal — where a document is registered and searched, where the sub-registry holding a village is confirmed, and where the department publishes the guideline value.
The register a project on Karnataka land is registered on, and searched on.
The register a project on Tamil Nadu land is registered on, and searched on.
Every SUYUG registration number, authority, promoter and survey line transcribed from the certificate — the primary-source version of the two-state comparison on these pages.
Every address above was opened on . Government sites move their pages; if one of these no longer resolves, the fact it holds up is unverified until someone finds where it went, not true because it was true once.
Named, not opened
The department's own published address, named here so you can reach the authority. It was not opened as part of this review, and this page quotes nothing from it.
Legislative Department, Ministry of Law and Justice, Government of India
India Code — the bare Acts (opens in a new tab)Where the text of a central or state Act is read, so that every section cited on this page can be checked against the section rather than against us.
Central Board of Indirect Taxes and Customs, Government of India
CBIC — GST notifications and circulars (opens in a new tab)Where the rate notifications issued under the Central Goods and Services Tax Act, 2017 are published, and where they are amended.
Goods and Services Tax Council
GST Council (opens in a new tab)The constitutional body whose recommendations precede a change in a GST rate, and which publishes what it recommended and when.
Goods and Services Tax Network
GST common portal — Search Taxpayer (opens in a new tab)Where a supplier's GST identification number is checked against the register, so an invoice can be tested rather than believed.
Income Tax Department, Government of India
Income Tax Department e-filing portal (opens in a new tab)Where Form 26QB is filed and paid, where the bare section is published, and where a taxpayer reads their own annual tax statement.
TDS Reconciliation Analysis and Correction Enabling System, Income Tax Department
TRACES (opens in a new tab)Where the buyer downloads Form 16B — the certificate that proves to the seller that the tax deducted actually reached the government.
Adjacent
What to read next
Ask for the invoice, not the assurance
Any promoter charging this tax correctly can tell you which notification the figure on your demand comes from, and can give you a tax invoice carrying a registration number you can check against the government’s own register. Ask for both.