In a sales lounge in Kokapet last month, a first time buyer put two printed quotes side by side. Both were for a 1,450 square foot flat. Both showed the same base price of about 1.15 crore. Yet the final figure at the bottom differed by nearly six lakh rupees. The gap was not a discount or a hidden charge. It was Goods and Services Tax, quietly added to one quote for an under construction tower and absent from the other, a ready flat that already had its occupancy certificate. That single line is where a lot of Hyderabad buyers lose the thread, so let us walk through exactly what GST you pay, when, and why.

The short answer. If you buy an under construction flat in Hyderabad, you pay GST of 5 percent of the agreement value on a normal residential flat, or 1 percent if the home qualifies as affordable housing. If you buy a ready flat that already has its occupancy certificate, you pay no GST at all. The trade off is real. A ready home saves you the GST outgo, but under construction stock is usually priced lower per square foot and gives you a longer payment runway, so the cheaper sticker can still win once you add everything up.

Do I pay GST when I buy an under construction flat in Hyderabad?

Yes. GST applies to any residential flat still under construction, because at that stage the law treats your purchase as a supply of construction service rather than a finished property. The standard rate for a normal residential flat is 5 percent of the agreement value, charged without input tax credit for the buyer. These rates have applied across India since 1 April 2019, and the GST 2.0 revision that took effect on 22 September 2025 left residential property rates unchanged, according to this rate breakdown. GST is a central levy, so it works the same way in Hyderabad as in any other Indian city. What changes from state to state is stamp duty and registration, not GST.

What is the difference between the 5 percent and 1 percent GST rates?

The 1 percent rate is reserved for affordable housing, and everything else sits at 5 percent. A home counts as affordable only when it clears two tests at the same time. First, the carpet area must be up to 60 square metres in a metro city, and Hyderabad is treated as a metro for this rule. Second, the total price must be up to 45 lakh rupees. Miss either limit and the flat falls into the 5 percent bracket, even if it is small or modestly priced. Because most new Hyderabad flats in growth corridors like Kokapet, the Financial District, and Tellapur are priced well above 45 lakh, the 5 percent rate is what the typical buyer here will see. Neither rate lets the buyer claim input tax credit, so the percentage you are quoted is the percentage you actually bear.

Why is there no GST on a ready to move Hyderabad flat?

Once a project has its completion certificate or occupancy certificate, a flat sold from it carries no GST. At that point the transaction is no longer a construction service. It becomes a sale of immovable property, which is excluded from GST under Schedule III of the Central GST Act, as explained in the same rate guide. This is why the occupancy certificate matters far beyond water and power connections. If a builder offers you a completed flat but cannot show a valid OC, insist on seeing it, because a home marketed as ready but still legally incomplete can drag GST and other complications back into the deal. Our Hyderabad occupancy certificate guide covers how to confirm one.

How does GST sit alongside stamp duty and registration?

GST, stamp duty, and registration are three separate charges, and buyers often blur them into one lump. GST is a central tax on the construction service and is paid to the builder along with your instalments. Stamp duty and the registration fee are state charges, paid to the Telangana registration department when your sale deed is registered, and they apply whether the flat is under construction or ready. In other words, buying a ready flat removes GST but never removes stamp duty and registration. For how those state charges are calculated and what they add up to in Hyderabad, see our Telangana stamp duty and registration guide. Keeping the three buckets distinct is the single most useful habit when you compare quotes.

How is the GST amount calculated on my payment plan?

GST is charged on each demand the builder raises, not as one payment at the end. On a construction linked plan, every instalment tied to a stage of work carries 5 percent GST on that instalment for a normal flat. So if a slab completion demand is 10 lakh rupees, the builder adds 50,000 rupees of GST to that demand. Over the life of the project these add up to 5 percent of the total agreement value. This is worth modelling before you sign, because a flat quoted at 1.1 crore is really costing you about 5.5 lakh more in GST spread across the build. Ask the builder for a full payment schedule that shows GST on every milestone, so there are no surprises when a demand letter lands. It also helps to see how GST interacts with your home loan. Banks usually fund the base cost and stage payments, and many will fund the GST component on each demand as well, but you should confirm this with your lender rather than assume it, because any part the bank does not cover has to come from your own pocket at exactly the moment a demand falls due. Building a simple month by month sheet of base amount, GST, and expected disbursement keeps you from being caught short midway through construction.

Can I claim any GST back or get input tax credit?

No. Residential buyers cannot claim input tax credit on an under construction flat, and the builder cannot pass any credit through to you either. That is the deliberate structure of the 5 percent and 1 percent scheme. The lower headline rates replaced an older regime that allowed credit but charged a higher effective rate, and the trade off was that credit was removed. For a home buyer this simply means the GST you pay is a final cost with no set off. Do not accept any promise of a GST refund or credit on a residential flat, and treat such a claim as a reason to read the paperwork more carefully.

What should a Hyderabad buyer check before paying GST to a builder?

Confirm the rate, the base, and the registration status before any money moves. The comparison table below shows how the same base price behaves under different situations, and the checklist after it gives you a running order for the actual purchase.

Use this seven step order when you are close to booking an under construction home in Hyderabad.

1. Ask whether the flat is under construction or already has an occupancy certificate, and get the answer in writing.
2. Confirm the GST rate that applies to your flat, 5 percent for a normal home or 1 percent only if it clears both affordable limits.
3. Check the carpet area and total price against the 60 square metre and 45 lakh thresholds if the builder claims the 1 percent rate.
4. Request a full payment schedule that lists GST separately on each construction milestone.
5. Verify that stamp duty and registration are quoted apart from GST, since they are state charges paid later.
6. Reject any offer of input tax credit or a GST refund on a residential flat, and question why it was made.
7. Keep every GST paid receipt with your booking file for your records and any future resale.

Is GST charged on the whole flat price or only part of it?

For a normal residential flat the 5 percent rate is applied to the agreement value the builder charges you. The 1 percent affordable rate works the same way on that value. Because neither rate allows input tax credit, the percentage you are quoted is the real cost you carry, with no separate set off to bring it down later.

Does a ready to move flat in Hyderabad attract any GST?

No. A completed flat that already has its occupancy certificate or completion certificate carries no GST, because the sale is treated as immovable property rather than a construction service. This is one of the clearest financial differences between under construction and ready stock, and it often narrows the price gap between the two options.

Is Hyderabad treated as a metro for the affordable GST limit?

Yes. For the 1 percent affordable housing rate, Hyderabad is treated as a metro, so the carpet area limit is 60 square metres rather than the 90 square metre limit used for non metro towns. The price cap of 45 lakh rupees is the same everywhere, and both conditions must be met together for the lower rate to apply.

Is GST the same as stamp duty and registration in Hyderabad?

No. GST is a central tax paid to the builder on an under construction flat, while stamp duty and the registration fee are state charges paid to the Telangana registration department when the sale deed is registered. Buying a ready flat removes GST but never removes stamp duty or registration, so always compare the three separately.

GST rules and rates can change with future notifications, so confirm the current position with the GST portal at cbic-gst.gov.in or a qualified chartered accountant before you finalise a purchase, and verify any occupancy certificate directly with GHMC. This guide explains how the charge works for buyers and is not tax or investment advice.

Last updated 2026-08-25. PropNewz Team.