GST on Commercial Property in Gurgaon: Buying and Renting
GST on commercial property is two completely separate questions, and mixing them up is the most expensive mistake buyers make in Gurgaon. Buying is one rate. Renting is another. And on the buying side, one document decides whether you pay 12% or nothing at all.
On a ₹1 crore office, that document is worth ₹12 lakh.
Key Takeaways
- Buying an under-construction commercial property attracts 12% GST, with input tax credit available.
- Buying a completed property that already has its completion certificate attracts no GST at all.
- Commercial rent attracts 18% GST, claimable as input tax credit if you are registered and using the space for taxable supplies.
- If your landlord is unregistered and you are registered, reverse charge applies and you pay the 18% directly to the government.
- GST registration is required once annual rental income crosses ₹20 lakh for commercial property.
Buying: the completion certificate decides everything
| What you buy | GST | Input tax credit |
|---|---|---|
| Under-construction commercial | 12% | Available |
| Completed, with completion certificate | Nil | Not applicable |
| Mixed-use building, residential part | 1% or 5% | Depends on the scheme |
| Mixed-use building, commercial part | 12% | Available |
The reason for the difference is legal rather than arbitrary. A sale after completion is a transfer of immovable property, which sits outside GST entirely. A sale before completion is treated as a supply of construction services, which does not.
So on a ₹1 crore purchase, the same office costs ₹1 crore completed and ₹1.12 crore under construction, before you count anything else.
But input tax credit changes the arithmetic
That 12% is not necessarily a cost. If you are GST-registered and buying commercial property for a taxable business use, you can generally claim it as input tax credit against your output tax liability.
Which means the real comparison runs like this:
- A registered business that can absorb the credit — the 12% largely washes out, and under-construction stock is genuinely cheaper per square foot. On Dwarka Expressway at ₹8,500-17,500 per sq ft, that matters.
- An individual investor with no output tax to set it against — the 12% is a real, permanent cost. Ready-to-move property is the cheaper route.
Work out which of those you are before you compare headline prices. It is the single biggest variable in a Gurgaon commercial purchase after the price itself.
Renting: 18%, and who actually pays it
GST on commercial rent is 18%. It applies to offices, shops, warehouses and coworking space alike.
On a ₹1 lakh monthly office rent, that is ₹18,000 a month, or ₹2.16 lakh a year. On the 17,260 sq ft floor in Sector 66 listed at about ₹19.85 lakh a month, it is roughly ₹3.5 lakh a month.
Three situations decide who pays it to the government:
- Landlord registered, tenant registered. The landlord charges 18% on the invoice and pays it. The tenant claims it as input tax credit.
- Landlord unregistered, tenant registered. Reverse charge applies — the tenant pays the 18% directly to the government, then claims the credit. This catches a lot of tenants in Gurgaon's plot-built belts, where individual landlords are often unregistered.
- Landlord's rental income under ₹20 lakh a year. No registration required, so no GST on that rent.
Don't confuse GST with TDS
They are separate obligations and both apply to a commercial lease.
TDS under Section 194-I is 10% on rent for land, building or furniture, once annual rent crosses ₹6 lakh. That threshold rose from ₹2.4 lakh with effect from 1 April 2025 — it is the change most often missed. TDS is deducted on the rent, not on the GST component.
So a tenant paying ₹1 lakh a month deducts ₹10,000 as TDS, pays the landlord ₹90,000, and separately handles ₹18,000 of GST.
Coworking, managed offices and virtual offices
Flexible workspace is treated as a supply of services, so 18% GST applies to the whole invoice — not just the desk, but the meeting-room credits, the printing and the after-hours access billed on top.
That matters when you compare a coworking quote with an office lease, because the two are usually quoted differently. Gurgaon coworking averages about ₹10,100 a seat a month; at 18% that is ₹11,918. A fifteen-seat team is paying about ₹1.79 lakh a month, not ₹1.5 lakh. Our coworking price guide sets out what each format costs by area, and the managed office guide covers the same question for a private floor.
A registered business claims that 18% back as input tax credit. An unregistered one — a small practice under the threshold, or a professional billing exempt services — does not, and should treat the GST as a real 18% on the seat price when comparing against a small private office.
Commercial and residential are taxed differently
It is worth stating plainly, because the two get conflated constantly:
- Residential rent to a private individual for personal use is generally exempt from GST. Commercial rent is not — it is 18% throughout.
- Under-construction residential attracts 1% or 5% depending on the scheme, without input tax credit. Under-construction commercial attracts 12%, with credit.
- In a mixed-use building, the two parts are taxed separately at their own rates.
This is why a residential landlord's experience is a poor guide to a commercial one. If you are moving from letting a flat to letting an office — a common step for Gurgaon investors buying a small unit in New Gurgaon or on Sohna Road — the GST position changes completely, and the ₹20 lakh registration threshold arrives faster than most people expect.
Property tax is a third, separate thing
Municipal property tax on commercial property in Gurgaon is charged by the MCG and has nothing to do with GST. Commercial office and mall space is charged in the region of ₹12 to ₹15 per sq ft, and ground-floor commercial shops from about ₹24 to ₹60 per sq yard depending on size. Our guide to Gurgaon property tax covers the working and how to pay it.
What this costs on a real purchase
| Item | Completed office | Under construction |
|---|---|---|
| Price | ₹1,00,00,000 | ₹1,00,00,000 |
| GST | Nil | ₹12,00,000 |
| Stamp duty at 7% | ₹7,00,000 | ₹7,00,000 |
| Registration at 1%, capped at ₹50,000 | ₹50,000 | ₹50,000 |
| Total outlay | ₹1,07,50,000 | ₹1,19,50,000 |
Stamp duty in Haryana is 7% for a male buyer inside municipal limits, 5% for a female buyer and 6% for joint buyers, calculated on the higher of the agreement value or the collector rate. Outside municipal limits it drops to 5% and 3%. The current collector rate schedule sets the valuation floor, and our registration charges guide works the whole calculation through.
Five things to get right
- See the completion certificate, not a promise of one. It is what removes the 12%.
- Establish whether you can use input tax credit before comparing an under-construction unit with a ready one.
- Check whether your landlord is GST-registered. If they are not and you are, reverse charge lands on you.
- Budget GST separately from rent in your cash flow. An 18% line on a large floor is not a rounding error.
- Remember the TDS threshold moved to ₹6 lakh a year from 1 April 2025. Deducting on the old ₹2.4 lakh basis, or not deducting at all, creates a liability you carry.
FAQ
Is GST applicable on buying commercial property in Gurgaon?
Only if it is under construction. An under-construction commercial purchase attracts 12% GST with input tax credit available. A completed property that already has its completion certificate attracts no GST, because the sale is treated as a transfer of immovable property rather than a supply of construction services.
What is the GST rate on commercial rent in India?
18%, on offices, shops, warehouses and coworking space. It is claimable as input tax credit by a registered tenant using the space for taxable supplies.
What happens if my landlord is not registered for GST?
If you are registered and your landlord is not, reverse charge applies — you pay the 18% directly to the government and then claim the credit. This is common in Gurgaon's plot-built belts where landlords are individual owners.
Is there a GST exemption on commercial rent?
A landlord whose annual rental income stays under ₹20 lakh for commercial property does not need to register, so no GST is charged on that rent.
Is TDS the same as GST on office rent?
No, they are separate and both apply. TDS under Section 194-I is 10% on rent above ₹6 lakh a year — a threshold that rose from ₹2.4 lakh on 1 April 2025 — and is deducted on the rent, not on the GST component.
Can I claim input tax credit on GST paid to buy an office?
Generally yes if you are GST-registered and buying for a taxable business use. An individual investor with no output tax liability to set it against cannot, which makes the 12% a permanent cost and ready-to-move property the cheaper route.
Working out whether an under-construction unit or a ready one costs you less after tax? Tell us your GST position and the two properties you are comparing, and we will run the numbers with you.
