GST on Stamp Duty – Is It Applicable or Exempt?

Ravi recently purchased a flat in Bengaluru for ₹75 lakh. While finalising the paperwork, he expected to pay approximately ₹3.75 lakh as GST, based on the 5 per cent rate applicable to under-construction properties. However, an additional ₹5.25 lakh appeared on the bill, comprising ₹5.1 lakh in stamp duty (7 per cent) and ₹15,000 in registration charges (0.2 per cent).

Ravi asked whether GST would also apply to this ₹5.25 lakh. The answer is: no, it does not.

While GST covers the construction component of property transactions, stamp duty and registration fees fall entirely outside the GST framework. These are state-imposed charges governed by separate legislation and are not subject to GST.

GST on Stamp Duty – A Short Introduction

The Goods and Services Tax (GST) has significantly restructured indirect taxation in India since its implementation in 2017. It consolidated various central and state levies into a single, unified system, thereby simplifying compliance for businesses and individuals.

However, GST does not apply to all forms of taxation. Stamp duty and registration charges remain outside its scope and continue to be governed by state-specific legislation. State governments impose stamp duty on legal instruments such as property sale agreements, lease deeds, gift deeds, and other documents that require legal validation. This duty is administered under the Indian Stamp Act, 1899, along with corresponding state rules.

Unlike taxes that were absorbed into the GST framework—such as value-added tax, service tax, and excise duty—stamp duty and registration fees operate independently. Therefore, GST is not levied on these charges, and businesses or individuals are not required to pay GST on stamp duty payments.

GST on Stamp Duty – Category-wise Summary

Even though GST covers a wide range of goods and services, certain government-imposed charges like stamp duty and registration still fall outside its purview. Here's a detailed breakdown of common stamp-related transactions and their GST applicability, now explained with practical numerical examples:
 

Key Takeaway: Stamp duty is a state-imposed fiscal duty, and GST is not levied on it under any category. However, GST may still influence associated costs, such as materials and services.

Read More – GST on Rental Income

HSN Codes for Stamp Duty – Not Applicable

The HSN (Harmonized System of Nomenclature) is a system used under GST to classify goods and services. However, since stamp duty is neither a good nor a service, HSN codes are not assigned to any stamp duty-related items.

Here’s a simple reference table:
 

Explanation: Since stamp duty and registration charges fall under state subjects, they are not taxable under GST and do not require HSN classification.

Types of Stamp Duty and Their GST Applicability

Stamp duties can be collected in various forms depending on the nature of the document and the method of payment. Regardless of format, GST is not applicable to any of these stamp types, as detailed below:
 

Note: Whether it’s a paper stamp, e-stamp, or franking, the duty is always governed by the state's stamp laws and kept out of the GST framework.

Impact of GST on Stamp Duty and Registration:

While stamp duty and registration fees are not taxed under GST, the overall property transaction cost can still be significantly impacted by GST, especially in cases involving under-construction properties or construction materials.

Let’s understand this with two clear examples:

Example: Construction of a New Flat
 

Even though stamp duty and registration add ₹4.5+ lakhs, GST is only applied to the construction value, not to these state charges.

Also Read - GST on Commercial Property

Input Tax Credit (ITC) on Stamp Duty

Input Tax Credit (ITC) allows businesses to claim credits for the GST paid on inputs or services used in their operations. But can stamp duty or registration fees qualify for ITC? Let’s explore:

Why No ITC on Stamp Duty?

• Stamp duty is not a GST-based tax

• It is a state-imposed levy, and not considered a “supply” under GST law

• Thus, businesses cannot claim ITC on stamp duty or registration, even for commercial properties

Conclusion

Stamp duty and registration charges are not covered under GST. These are state-level taxes, managed by the Indian Stamp Act and state rules. GST has made many indirect taxes uniform, but it does not apply to stamp duty, registration, or stamp papers.

However, GST can still affect property deals through taxes on construction and legal services. Since no GST is paid on stamp duty, you cannot claim any Input Tax Credit on it.

Knowing this difference helps people and businesses correctly calculate property costs and follow the rules during real estate transactions.

FAQs

1. What is the GST on stamp duty in India?

There is no GST on stamp duty. It is governed by state-specific stamp acts and remains outside the scope of GST.

2. Is GST leviable on stamp duty?

No, GST is not leviable on stamp duty. It is not considered a supply of goods or services.

3. Is there any GST on stamp paper?

No, both judicial and non-judicial stamp papers are exempt from GST. These are treated as legal instruments under state laws.

4. Is RCM (Reverse Charge Mechanism) applicable to stamp duty charges?

No. Since stamp duty is not a taxable supply, RCM does not apply.

5. Why was stamp duty not subsumed under GST?

Stamp duty is a state revenue tool, governed under Entry 63 of the State List in the Constitution. It was excluded from the GST framework to protect state autonomy over revenue.
 

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