Answered on November 08, 2017
This is a very generic question. However, it would depend upon the facts of each case. Under the VAT regime, many States had introduced composition scheme with tax rates as low as 1%, without Input Tax Credit (ITC). There is no such composition scheme under the GST regime. At the same time, builders would be eligible to claim ITC on inputs/input services used in the execution of works contract. It is believed that the overall tax cost on sale of under construction property would increase marginally to 4-5% under the GST regime depending on the area.
