Eldeco EOE GST & Input Tax Credit

The Current GST Regime for Residential Property (April 2019 Onwards)

The GST Council, in its 33rd meeting (February 2019), restructured the GST regime for residential property. Two key changes effective April 2019:

1. Rate reduction — from 12% (with input tax credit) to 5% (without input tax credit) for non-affordable residential under-construction property.
2. Affordable housing — defined as units up to ₹45 Lakh in metros (₹30 Lakh in non-metros) with carpet area ≤ 60 sq.m in metros / 90 sq.m in non-metros — attracts 1% GST (no ITC).

Eldeco Echoes of Eden falls squarely in the non-affordable residential category given its price points (starting ~₹1.12 Cr for the smallest 2 BHK) and carpet areas (700+ sq.ft, ~65+ sq.m). Therefore: 5% GST, no input tax credit.

What 'No Input Tax Credit' Means for Buyers

Under the older 12%-with-ITC regime (pre-2019), buyers received credit for the GST that builders had paid on their own inputs (cement, steel, labour services etc.). This brought the effective tax burden down to roughly 6-8% of the property cost. The 2019 reform simplified this — buyers now pay a flat 5% with no further credits, and builders absorb the input GST themselves (or price it into the base cost).

Practically, for a buyer:

• No need to track ITC claims, no input invoices to maintain, no GSTIN required.
• The 5% rate is final — no further GST recovery possible.
• Whether the effective rate is 'better' than the old 12%-with-ITC depends on the project's input cost structure; for most premium projects the 5% is close to or slightly better than the old regime.

How GST is Paid — Matching the 30:40:30 Schedule

GST is collected by the developer alongside each milestone instalment under the construction-linked 30:40:30 schedule. The exact sequence for a 3 BHK + 2T at ₹1.39 Cr BSP:

Note: This calculation assumes the final 30% possession-stage payment falls AFTER OC is issued (the standard sequence). If a portion of the possession-stage payment falls before OC, that portion still attracts 5% GST.

GST on Parking, PLC, IBMS, Club Fee

The developer's full cost sheet typically includes:

• BSP — base sale price (₹8,999/sq.ft × super area)
• Floor Rise Premium — added on higher floors
• PLC (Preferred Location Charge) — added for premium-view / corner units
• Parking — typically ₹3–5 Lakh for one covered parking
• Club Membership — typically ₹1–3 Lakh one-time
• IBMS (Interest-Bearing Maintenance Security) — refundable deposit
• External / Internal Development Charges — depending on local norms

For GST purposes, all of these are bundled into the agreement value. Total GST is 5% of (BSP + PLC + parking + club + EDC + IDC). One nuance: refundable deposits like IBMS may have GST charged at remittance and refunded at exit — confirm in AFS.

Stamp Duty + Registration — On Top of GST

Stamp duty and registration are state-level levies independent of GST. They apply to the AFS at signing. For UP:

• Male buyer / joint owner — 7% stamp duty
• Female sole or primary owner — 6% (under current rebate)
• Registration fee — 1% (across all gender / ownership)

For a 3 BHK + 2T at ₹1.39 Cr BSP (male buyer): stamp duty ₹9.73 Lakh + registration ₹1.39 Lakh = ₹11.12 Lakh in state-level levies, on top of the ~₹4.89 Lakh in GST.

Total Tax Burden — Worked Example

This is one of the biggest reasons buyers should focus on all-in cost rather than BSP alone. See the total cost calculator for a configuration-specific all-in number.

Post-OC: GST Exemption Window

The single most important GST mechanic for buyers is the OC threshold. Once the Occupancy Certificate is issued (Eldeco EOE's RERA-declared possession target is January 2031), the property is classified as 'completed' / ready-to-move. Any payment made AFTER OC is GST-exempt.

Practically, this means:

• The 30% possession-stage payment in the 30:40:30 plan typically falls after OC — saving ~₹2 Lakh in GST on a 3 BHK at ₹1.39 Cr.
• If you delay your possession-stage payment intentionally to wait for OC, you save GST — but this is a fine line; significantly late payment can attract developer-side late fees.
• Resale buyers who purchase the unit post-OC pay no GST at all — they pay only stamp duty + registration on the resale agreement.

NRI Buyers — Same GST Treatment

GST is a destination-based tax — it applies to the property's location, not the buyer's residential status. NRI buyers pay the same 5% GST as resident buyers. The income-tax treatment (under 80C, 24(b), 80EE / EEA) differs and is covered in the tax benefits guide and the NRI investment guide.

Practical Sequence for Tax-Aware Buyers

1. Get the live cost sheet from Sachin for your configuration — it itemises BSP, GST, stamp duty, parking, PLC etc. so you see the all-in number.
2. Decide sole vs joint ownership — female sole owner saves 1% on stamp duty (~₹1.4 Lakh on a 3 BHK).
3. Time the possession-stage payment — ideally after OC issuance to save GST on the final 30%.
4. Plan tax-deductible bunching — stamp duty + registration are 80C-eligible in the year of payment (subject to the ₹1.5 Lakh basket).
5. Get a CA's review of the cost sheet before AFS signing.

Bottom Line

The 5% GST on Eldeco EOE under-construction instalments is non-recoverable but predictable. Combined with UP stamp duty + registration, total state + central taxes account for ~10–12% of the BSP. The biggest mechanic to know is the OC threshold — payments after OC are GST-exempt, which the 30:40:30 plan implicitly captures in the final 30%. For complete clarity, request the live cost sheet from Sachin, which lists GST tranche by tranche, and have a CA validate it before signing the AFS.