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GST Election Modeller — 1%/5% vs 12%/8%, with the RCMs everyone forgets
The real GST cost isn't the rate on your invoice — it's the rate plus cement RCM (at 28%, not 18%), plus the 80%-registered shortfall RCM (18%), plus TDR/FSI RCM proportionate to unsold-at-CC. This tool models both schemes side-by-side with all three RCMs surfaced.
Project profile
Numbers
NEW scheme · 5% no ITC
GST out ₹2,50,00,000 · 80% shortfall RCM ₹24,30,000 · TDR RCM ₹18,00,000
Total: ₹2,92,30,000
The old-scheme election was a ONE-TIME, historical option — via Annexure IV to Notification 11/2017-CT(R), for projects where BOTH bookings and construction started before 1 Apr 2019. It cannot be freshly chosen for a new project today.
Cement from an UNREGISTERED supplier attracts RCM at 28% on the cement value — NOT 18%. Buy cement from a GST-registered supplier, always, on the new scheme.
The 80%-from-registered rule (excl. cement, capital goods, TDR/FSI, electricity, HSD, motor spirit): the shortfall attracts 18% RCM on the promoter. Track it monthly, not annually.
TDR/FSI RCM under Notification 5/2019-CT(R) is proportionate to UNSOLD-at-CC apartments (residential portion) — plan the CC vs sales run-rate.
Sale after issue of the completion certificate = no GST (Schedule III CGST Act, 2017). Timing the sale calendar matters.
The "1% is always cheaper" myth: with heavy cement + high sub-contract mix, 12%-with-ITC can beat 5%-no-ITC. Run the numbers before assuming.
FAQ
Can I still choose the 12%/8% ITC scheme for a new project?
No. The old-scheme option was a ONE-TIME election under Annexure IV to Notification 11/2017-CT(R) as amended, available only for projects where BOTH bookings and construction started before 1 April 2019 (ongoing projects). Absence of a timely Annexure IV election meant deemed migration to the new scheme. It is a historical, irrevocable choice — not a live selector.
What is the effective GST rate on a new residential project?
1% affordable (statutory 1.5% on 2/3 of gross consideration after the 1/3 deemed-land deduction) or 5% other residential (statutory 7.5% on 2/3) — Notification 3/2019-CT(R). No ITC. Commercial in an RREP with ≤15% commercial is treated as residential (5% no-ITC). Pure commercial or REP with >15% commercial: 18% with ITC.
Is cement really taxed differently under RCM?
Yes. Under the new scheme, cement must be procured from a GST-registered supplier. If procured from an unregistered supplier, the promoter pays RCM at the cement rate — 28%, not 18%. The 18% RCM applies to the general 80%-from-registered shortfall on OTHER inputs and input services.
What is the 80%-registered rule?
Under the new scheme, at least 80% of the value of inputs and input services (other than cement, capital goods, TDR/FSI, floor-space-index, electricity, HSD and motor spirit) must come from GST-registered suppliers. Any shortfall attracts 18% RCM on the promoter. Track it monthly — a year-end reconciliation is a bill that arrives after your margin has already been priced.
How does TDR / FSI RCM work?
Notification 5/2019-CT(R) shifts GST on TDR/FSI/development rights to the promoter under RCM. Notification 4/2019-CT(R) then exempts the portion attributable to residential apartments proportionately — subject to the position at CC. The RCM you actually pay is proportionate to UNSOLD residential apartments at the CC date. A high unsold ratio at CC turns TDR into a real cash liability.
What about sale after completion certificate?
No GST — Schedule III to the CGST Act, 2017 treats sale of a building where the entire consideration is received after the CC (or first occupation, whichever is earlier) as neither goods nor services. Timing the sale calendar around CC has real GST consequences.
Every RERA + tax touchpoint on one calendar
Harun Raaj & Associates · Chartered Accountants, Visakhapatnam. Recurring RERA-CA support, GST scheme audit, and the tax structure decisions your compliance CA doesn't have time for.
See the RERA-CA engagement →Educational tool, not professional advice. Simplifications: ITC estimates use aggregated rates, not invoice-level detail. The 80% shortfall RCM uses a proxy calculation; the statutory computation is performed monthly by tax period. ITC reversal on unsold-at-CC (old scheme) uses the unsold-percentage proxy — Annexure A/B of Notification 3/2019 prescribes the formal formula. Consult a chartered accountant before signing bookings, TDR/JDA agreements or making scheme-related decisions.