Real estate services are one of the most important sectors of the Indian economy, contributing to about 6–7% of the GDP. Real estate services include various activities related to the ownership, use, and transfer of immovable properties such as land, buildings, and structures. These services are classified under the SAC code 9972 and are subject to GST at the rate of 18% unless exempted or otherwise specified.
In this blog post, we will discuss the different types of real estate services that fall under the SAC code 9972 and their GST rates. We will also explain the meaning and significance of the SAC code and how it helps in identifying and classifying services for taxation purposes.
What is the SAC Code?
SAC code stands for Services Accounting Code. It is a six-digit code that is used to classify the services under the GST regime. The SAC code is developed by the Service Tax Department in India and is based on the international classification system for services adopted by over 200 countries in the course of international trade.
The SAC code helps in identifying the nature and category of the service, the applicable GST rate, and the place of supply. The SAC code also helps in filing GST returns, generating invoices, and claiming input tax credits.
The SAC code consists of two parts: the first two digits represent the chapter or the major group of services, and the remaining four digits represent the sub-group or the specific service. For example, the SAC code 9972 represents the chapter of real estate services, and the SAC code 997211 represents the sub-group of rental or leasing services involving owned or leased residential property.
Types of Real Estate Services and their GST Rates
The SAC code 9972 covers the following types of real estate services involving owned or leased property:
997211 Rental or Leasing Services Involving Own or Leased Residential Property
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This service involves renting or leasing out residential properties such as houses, apartments, flats, rooms, etc. for use as a dwelling.
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The service provider may be the owner or lessee of the property.
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The service recipient may be an individual, a family, a group of persons, or a business entity.
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The service may be provided for a short-term or a long-term period, depending on the agreement between the parties.
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The GST rate for this service is 18% unless the service is exempted under certain conditions.
997212 Rental or Leasing Services Involving Own or Leased Non-Residential Property
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This service involves renting or leasing out non-residential properties such as office buildings, shops, warehouses, factories, etc. for use as a place of business, commerce, industry, or other purposes.
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The service provider may be the owner or lessee of the property.
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The service recipient may be a business entity, a government organization, a non-profit organization, or any other entity.
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The service may be provided for a short-term or a long-term period, depending on the agreement between the parties.
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The GST rate for this service is 18%.
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997213 Trade Services of Buildings
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This service involves buying, selling, or exchanging buildings or parts of buildings.
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The service provider may be a real estate agent, a broker, a dealer, or any other intermediary who facilitates the transaction between the buyer and the seller.
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The service recipient may be an individual, a business entity, or any other entity that acquires or transfers ownership or the right to use the building or part of the building.
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The service may be provided for residential or non-residential buildings, depending on the nature and purpose of the transaction.
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The GST rate for this service is 18%.
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997214 Trade Services of Time-share Properties
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This service involves buying, selling, or exchanging rights to use or occupy a property for a specified period, usually on a yearly or seasonal basis.
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The service provider may be a time-share developer, a marketer, a reseller, or any other intermediary who facilitates the transaction between the time-share owners and the time-share users.
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The service recipient may be an individual, a family, a group of persons, or any other entity that acquires or transfers the right to use or occupy the property for a specified period.
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The service may be provided for residential or non-residential properties, depending on the nature and purpose of the transaction.
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The GST rate for this service is 18%.
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997215 Trade Services of Vacant and Subdivided Land
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This service involves buying, selling, or exchanging of vacant or subdivided land.
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The service provider may be a land developer, a land broker, a land dealer, or any other intermediary who facilitates the transaction between the landowner and the land buyer.
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The service recipient may be an individual, a business entity, or any other entity that acquires or transfers the ownership or the right to use the land.
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The service may be provided for agricultural, residential, commercial, industrial, or any other purposes, depending on the nature and purpose of the transaction.
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The GST rate for this service is 18%.
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Findings
Real estate services are an essential part of the Indian economy and society. They involve various transactions and activities related to the ownership, use, and transfer of immovable properties.
These services are classified under the SAC code 9972 and are subject to GST at the rate of 18% unless exempted or otherwise specified. The SAC code helps in identifying and classifying the services for taxation purposes and also provides clarity and uniformity in the GST regime.
