GST is the charge buyers misunderstand most. You pay it on an under-construction flat, but not on a plot of land, and not on a ready flat. Getting this right can change what you owe by lakhs, and it is also where some sellers add a charge that should not be there. This guide explains, in plain terms, when GST applies to a property in the YEIDA area and when it does not: the rates on flats, the affordable-housing cut-off, why land is outside GST, and the position on the premium you pay YEIDA. This is general information, not tax advice; confirm your case with a chartered accountant.
Key facts at a glance
- No GST on a plot. Sale of land is outside GST, and a developed plot with roads, drainage and power is still land.
- Under-construction flat: 5% GST on a normal flat, 1% on an affordable one, with no input tax credit for the buyer.
- Ready flat: no GST if the completion or occupancy certificate was issued before you bought, and no GST on a resale.
- Affordable housing means a carpet area up to 60 sq m in a metro or 90 sq m elsewhere, and a value up to ₹45 lakh.
- The YEIDA plot premium is a transaction in land for a residential plot, so generally no GST; long-term industrial-plot lease premiums have a specific exemption.
Buying a plot: no GST
Under the GST law, the sale of land is listed in Schedule III as neither a supply of goods nor services, so it is outside GST. A CBIC circular of 3 August 2022 (Circular No. 177/09/2022) clarified that this holds even for a developed plot, one sold with roads, drainage, water and electricity lines; it is still a sale of land and attracts no GST. So a YEIDA plot, or a developed plot in a private colony, does not carry GST on the land price. Two cautions:
- A separate construction contract does. If you buy a plot and also sign a contract for the seller to build a house, the construction service attracts GST even though the land does not.
- Ask for a single price. If a developer itemises “development charges” separately, it can invite a GST dispute. A composite plot price keeps it clean.
Buying a flat: it depends on the stage
| What you are buying | GST |
|---|---|
| Under-construction flat (sold before the completion certificate), normal | 5% of the price, no input tax credit |
| Under-construction affordable flat | 1% of the price, no input tax credit |
| Ready flat, completion or occupancy certificate issued before sale | No GST |
| Resale of a flat | No GST |
The rule turns on the completion certificate. A flat sold before the certificate is a supply of construction service and carries GST; once the certificate is issued, selling the flat is a transaction in immovable property, outside GST. So on a ready or resale flat there is no GST, only stamp duty and registration. For how a flat on YEIDA land is held, see our guide to buying a flat in a YEIDA group housing project.
What counts as affordable
A flat qualifies for the 1% rate as affordable housing if both apply: the carpet area is up to 60 sq m in a metropolitan area or up to 90 sq m elsewhere, and the value is up to ₹45 lakh. Miss either, and the 5% rate applies. Neither rate lets the buyer claim input tax credit, which is why builders price it in.
The YEIDA plot premium and lease
A common worry is whether GST applies to the premium you pay YEIDA for the plot. For a residential plot, the allotment and lease are a transaction in land, so there is generally no GST on the premium itself. For industrial and infrastructure plots, there is a specific exemption: the upfront amount (called premium, salami or development charges) for a long-term lease of 30 years or more of such plots by a state development authority is exempt from GST under Entry 41 of Notification 12/2017. Two points to note:
- Other charges can carry GST. Maintenance, and separate services billed by a developer or maintenance agency, can attract GST even where the land does not.
- Reselling a leasehold allotment is unsettled. Whether GST applies to the transfer or assignment of leasehold rights has been litigated and is not fully settled. If you are buying or selling an allotment on transfer, confirm the current GST position with a tax professional. The plot-transfer process is in our guide to transferring a YEIDA plot.
How GST sits with the other costs
GST is only one line in the bill. On a plot there is no GST but there is stamp duty, registration, the premium, location charges and the one-time lease rent, all set out in our guide to the full cost of a YEIDA plot. On an under-construction flat you pay GST on the price plus stamp duty and registration on the deed. Ask the seller for a written break-up of price, GST and the duties before you commit, and check the completion-certificate date, because it decides whether GST is due at all. The duty side is in our guide to stamp duty and registration in Uttar Pradesh.
Common questions
No. Sale of land is outside GST, and a developed plot with roads, drainage and power is still a sale of land. Only a separate construction contract on the plot would carry GST.
5% of the price for a normal flat and 1% for an affordable one, in both cases without input tax credit for the buyer.
No, if the completion or occupancy certificate was issued before you bought it, and no GST on a resale. You pay only stamp duty and registration.
A flat with a carpet area up to 60 sq m in a metro or 90 sq m elsewhere, and a value up to ₹45 lakh. It is taxed at 1% instead of 5%.
For a residential plot, the premium is a transaction in land, so generally no GST. Long-term leases of industrial and infrastructure plots by the authority have a specific GST exemption. The GST on reselling a leasehold allotment is unsettled, so confirm with a professional.
Please verify before you commit. GST rates, the affordable-housing limits and the treatment of leasehold transfers can change and are litigated, and your case depends on the facts. This is general information, not tax advice. Confirm the GST on your purchase with a chartered accountant, and get a written break-up from the seller.
Looking at a plot or flat on the Yamuna Expressway? Talk to our team. We check records before you commit.
Sources
- CBIC: Circular No. 177/09/2022-GST (3 August 2022): sale of developed plot is sale of land, no GST
- GST on flat purchase: 5% and 1% rates, affordable housing, no GST on ready or resale flats
- TaxGuru: GST on authority-allotted land, the Entry 41 long-term lease exemption and the leasehold-transfer position