GST for Real Estate Agents: Complete Guide to Brokerage, Commission & GST Compliance

GST for real estate agents refers to the Goods and Services Tax levied on the services provided by property brokers, real estate agents, property dealers, and consultants in facilitating the sale, purchase, rental, or lease of residential and commercial properties. These services fall under SAC Code 9972 — Real Estate Services and attract a uniform 18% GST rate.

Unlike builders who pay GST on the property value (for under-construction units), real estate agents pay GST only on their commission or brokerage income — not on the property transaction value. This is a fundamental distinction: a buyer does not pay GST on the property purchase price to the agent; they pay GST only on the agent's service fee/commission.

GST on commission income for real estate agents is straightforward — 18% GST is charged on the gross commission amount. The commission is typically calculated as a percentage of the property transaction value, but GST applies only on the commission — not on the property value.

Real estate agents specializing in commercial property — offices, retail shops, warehouses, industrial premises, co-working spaces, or commercial complexes — charge 18% GST on their brokerage/commission under SAC 9972. This is the same rate as for residential brokerage.

Yes — GST-registered real estate agents can claim Input Tax Credit (ITC) on business expenses used for their taxable brokerage services. Since agents provide taxable services (18% GST), they are entitled to offset the GST paid on business-related purchases against their GST liability. This reduces their effective tax outflow.

Real estate agents spend significantly on property portals (99acres, MagicBricks, Housing.com, NoBroker), digital advertising (Google Ads, Meta Ads), and CRM software. All these platforms charge 18% GST on their services — and a registered real estate agent can claim full ITC on these expenses, reducing net GST liability.

• 1

  Not registering for GST despite income above ₹20 lakh

  Many agents believe RERA registration or income tax filing is sufficient. They continue earning brokerage without GST registration — accumulating a significant unregistered liability with interest at 18% p.a. from the date of crossing the threshold.

  Calculate total commission income each financial year. Once it crosses ₹20 lakh (or ₹10 lakh in special states), apply for GST registration immediately — within 30 days. Register proactively to also claim ITC on portal and advertising expenses.
• 2

  Charging wrong tax type — CGST+SGST instead of IGST for inter-state deals

  An agent in Bengaluru (Karnataka) brokers a deal for a property in Chennai (Tamil Nadu) and charges CGST+SGST (Karnataka) — this is legally wrong. Place of supply is Chennai (Tamil Nadu), so IGST must be charged.

  Always determine the place of supply based on the property location — not the agent's location or client's location. If the property state ≠ agent's state, charge IGST. Issue a credit note for the wrong invoice and reissue with the correct IGST treatment.
• 3

  Not issuing GST invoice for cash commission payments

  Agents often receive cash commission from individual sellers or landlords and do not issue GST invoices — treating it as "informal income." This causes a mismatch between ITR income, Form 26AS, and GST returns — a major red flag for scrutiny under the Department's data analytics.

  Issue a GST invoice for every commission received — whether cash, cheque, or bank transfer. Declare all commission income in GSTR-1 and GSTR-3B. Pay 18% GST on cash transactions too. Consistency between ITR and GST returns protects you from notices.
• 4

  Not providing GSTIN to property portals — missing ITC on portal fees

  Agents subscribe to 99acres, MagicBricks, Google Ads etc. but forget to provide their GSTIN to these platforms. The portals raise B2C invoices — and the agent cannot claim ITC on the 18% GST paid to these platforms, resulting in unnecessary tax cost.

  Log in to all portal and advertising accounts and update your GSTIN in the billing section immediately. Request revised invoices (with your GSTIN) from portals for past quarters where possible. Ensure all future subscriptions are billed to your GSTIN for proper ITC flow.
• 5

  Confusing property GST rate with agent's GST rate

  Some agents incorrectly charge 5% GST (the rate applicable to under-construction property sales by builders) on their brokerage invoice — thinking the property rate applies to them as well. This is fundamentally wrong.

  Remember: builders charge 1%/5%/18% GST on property sale value. Real estate agents always charge 18% GST on their commission/brokerage amount — regardless of the type of property. These are two completely separate transactions under GST.
• 6

  Missing SAC code on commission invoices

  Agents issue invoices mentioning only "commission" or "brokerage" without the SAC code — making invoices non-compliant under Rule 46(h) of CGST Rules. Corporate clients reject such invoices for ITC as they are technically incomplete.

  Always mention SAC Code 997221 on every commission invoice. Also include the property address or project name as description. Use billing software that auto-populates SAC codes — this eliminates the error entirely.
• 7

  Claiming ITC on personal car used partly for site visits

  Agents frequently visit project sites and properties using their personal car and assume they can claim ITC on the car purchase or fuel. Motor vehicle ITC is blocked under Section 17(5)(a) unless the agent is in the business of transport, driving school, or tours.

  Do not claim ITC on personal car purchase, insurance, or repair for real estate brokerage use. ITC on car is strictly blocked. Cab/auto expenses for site visits through taxi aggregators (Ola, Uber) may be claimable if proper GST invoice is obtained — consult a CA.

• Obtain GST registration once commission income exceeds ₹20 lakh/year
• Display GSTIN on all commission invoices, letterheads, and visiting cards
• Charge 18% GST on every commission / brokerage invoice — residential or commercial
• Use SAC Code 997221 on all real estate agent service invoices
• Determine correct place of supply — property location, not agent's office
• Charge CGST+SGST for same-state deals; IGST for cross-state property deals
• Issue invoice within 30 days of service completion / receipt of commission
• Provide your GSTIN to 99acres, MagicBricks, Google Ads, and all portals
• Claim ITC on office rent, portal fees, digital ads, and CRM subscriptions via GSTR-2B
• Do NOT claim ITC on personal car, food, or personal expenses
• File GSTR-1 by 11th monthly (or 13th quarterly under QRMP)
• File GSTR-3B and pay GST by 20th of each month
• Reconcile GSTR-2B before claiming ITC in GSTR-3B
• Maintain deal-wise invoice register — property address, commission, GST, client GSTIN
• File GSTR-9 annual return by 31st December (T/O > ₹2 crore)
• Reconcile commission income in GST returns with ITR for the same year
• Generate e-Invoices for B2B clients if annual T/O exceeds ₹5 crore
• Opt for QRMP scheme if annual turnover is below ₹5 crore — reduces filings
• Deduct / handle TDS under Section 194H when applicable (corporate clients)
• Keep all portal subscription invoices, ad invoices, and office rent invoices safely for 6 years