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An Indian real estate developer selling under-construction non-affordable apartments collects PLC (preferential location charges — higher floor, corner unit, park-facing, pool-view) as a distinct line on the buyer's demand-letter schedule, but the GST treatment on PLC is often mis-recorded — either as a separate 18% service supply, or as an out-of-GST premium, or bundled at the wrong composite rate — creating a triangular reconciliation exposure across the sale deed, the composite GST invoice and the RERA Form 4 progress report.
Apply CBIC Circular 197/09/2023-GST composite-supply rule — bundle PLC, floor-rise, car parking and common-area charges with the principal apartment sale under Section 8 CGST + Schedule II Entry 5(b), tax at the same effective rate as the principal (5% CGST for under-construction non-affordable, 1% for affordable, NIL for post-CC), embed the 1/3rd deemed land deduction in the effective rate, tie every PLC rupee across sale-deed line-item, composite GST invoice line and the developer's PLC revenue sub-ledger.
Project master keyed by RERA registration with construction status flag (under-construction vs post-CC); price sheet per unit with base consideration + PLC schedule by floor / view / orientation + car parking + floor-rise; composite invoice template with HSN 9954, effective rate (5% / 1% / NIL) per project status; composite-supply register aggregating all bundled line-items per invoice; RERA Form 4 progress report ingestion tied to customer collection register; buyer-side TDS 26QB reconciliation tied to the composite consideration.
A per-unit reconciliation view showing the base consideration, the PLC line-item, the aggregate composite consideration and the applicable GST rate with clear under-construction vs post-CC flag; a monthly composite-supply register tie-out to Form GSTR-1 outward supply table; a quarterly RERA Form 4 progress report tie-out showing PLC-inclusive collections in escrow; an audit-ready evidence pack per unit linking the sale deed PLC line, the composite GST invoice line and the developer's revenue-recognition entry.
A Bengaluru-headquartered developer with an under-construction non-affordable project priced at a base consideration of ₹1.6 crore per 25th-floor unit is closing the quarter and the GST controller flags an old dispute — a legacy consultant classified the ₹8 lakh PLC line on 42 units as a separate 18% service supply, generating a purported ₹60 lakh output tax that was actually never due because PLC is a composite supply with the apartment sale and taxes at the same 5% CGST rate as the principal. Under PLC preferential location charges GST real estate rules clarified by CBIC Circular 197/09/2023-GST dated 1 August 2023, the entire ₹1.68 crore consideration — base plus PLC — is a single composite supply taxed at one effective rate. Getting the classification right on Day 1 is the difference between a clean GSTR-1 filing and a five-figure refund claim that the department will contest on the basis that the tax was passed on to the buyer.
Quick reference
| Item | Value |
|---|---|
| Governing law | CGST Act 2017 |
| Composite supply provision | Section 8(a) — principal supply rate applies |
| Classification anchor | Schedule II Entry 5(b) — construction is a supply of service |
| Rate notification | Notification 3/2019-Central Tax (Rate) dated 29 March 2019 |
| Under-construction non-affordable | 5% CGST (2.5% CGST + 2.5% SGST), no ITC |
| Under-construction affordable | 1% CGST (0.5% CGST + 0.5% SGST), no ITC |
| Post-CC ready flat | NIL GST — Schedule III Entry 5 (out of scope) |
| Clarification circular | CBIC Circular 197/09/2023-GST dated 1 August 2023 |
| PLC treatment | Bundled with principal — same rate as principal |
| Deemed land value | 1/3rd of total consideration (built into effective rate) |
| HSN | 9954 (construction service) |
The reconciliation in one paragraph
Every buyer of an under-construction non-affordable apartment pays a base consideration plus a schedule of add-on charges — PLC for a higher floor or a park-facing orientation, floor-rise on top of the base rate, car parking allotment, and common-area development charges. Under Section 8 of the CGST Act and CBIC Circular 197/09/2023-GST, these add-ons are bundled with the principal supply of construction service and taxed at the same effective rate as the principal — 5% for under-construction non-affordable, 1% for affordable, NIL for post-CC ready. PLC reconciliation ties the PLC line on the sale deed to the PLC line on the composite GST invoice to the PLC revenue sub-ledger in the developer’s books, and rolls the composite consideration into both the monthly GSTR-1 and the quarterly RERA Form 4 progress report. Getting the composite classification wrong — either splitting PLC out as an 18% service or treating it as an out-of-scope premium — is the single largest source of GST reclassification disputes on a developer’s audit report.
What PLC looks like in India
Every large Indian developer publishes a per-unit price sheet that separates the base consideration from a menu of add-on charges. The published names vary — some developers call it PLC, some call it “Location Advantage Charge” (LAC), some call it “Preferred Unit Premium” — but the economic substance is identical: an extra rupee-per-square-foot charge for units that a buyer perceives as more valuable within the same project. Common PLC categories include:
- Floor PLC — every floor above a threshold (typically the 5th or 10th) attracts a per-floor premium, sometimes calibrated as ₹25 or ₹50 per square foot per floor
- Corner unit PLC — corner apartments with two exterior exposures command a flat premium
- View PLC — park-facing, pool-view, sea-view, golf-facing orientations
- Vastu PLC — north-east or east-facing units in projects targeting communities that price this feature
- Podium / low-rise PLC — sometimes low-rise units command a premium over mid-rise in luxury projects with garden-level villas
Illustrative developer brand references — DLF Camellias, Godrej Properties Godrej Reserve, Oberoi Realty Oberoi Sky City, Prestige Estates Falcon City, Brigade Enterprises Brigade Meadows, Sobha Dream Acres, Puravankara Purva Windermere, Macrotech (Lodha) Lodha Park, Sunteck Realty Sunteck City, Kolte-Patil 24K Espada — each publishes a floor-PLC and view-PLC schedule as part of the standard price sheet, and each buyer’s demand-letter schedule shows the PLC computation as a distinct line-item under the base consideration.
The critical operational fact for reconciliation is that PLC is not a discretionary premium negotiated after the sale — it is a scheduled add-on published on the price sheet and locked into the buyer’s booking form and the eventual sale deed. That means every PLC rupee is traceable across three documents: the price-sheet PLC schedule, the booking-form line-item, and the registered sale deed. Reconciliation ties those three back to the composite GST invoice and the developer’s revenue books.
The regulatory overlay — Section 8, Schedule II, Circular 197/09/2023
The composite-supply treatment of PLC rests on three legal anchors.
Section 8(a) CGST Act 2017 — the composite supply rule. A composite supply comprising two or more supplies, one of which is a principal supply, is treated as a supply of the principal supply, and the GST rate applicable to the principal supply applies to the entire composite. Section 2(30) defines a composite supply as two or more taxable supplies naturally bundled and supplied in conjunction with each other in the ordinary course of business, where one of them is a principal supply.
Schedule II Entry 5(b) CGST Act 2017 — construction is a service. Construction of a complex, building, civil structure, or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after the issuance of completion certificate, is a supply of service. This anchors the principal supply — an under-construction apartment sale is a supply of construction service, not a sale of immovable property.
CBIC Circular 197/09/2023-GST dated 1 August 2023 — the specific clarification for PLC. The circular addresses several representations from the trade about the GST treatment of charges collected by a promoter along with the consideration for construction service. It clarifies that:
- Preferential Location Charges collected for a better-located apartment (higher floor, better view, corner unit, park-facing)
- Floor Rise Charges collected on top of the base rate
- Right to use car parking space
- Common area development charges
— are all naturally bundled with the principal supply of construction service and constitute a composite supply under Section 2(30). Accordingly they attract the same GST rate as the principal supply and are shown on the same tax invoice as line-items under the aggregate composite consideration. The circular closes a long-running dispute where some developers had been treating PLC as an independent 18% “service other than construction” supply, and the tax authorities had been assessing PLC as taxable at 18% in a few AAR rulings prior to 2019.
Notification 3/2019-Central Tax (Rate) dated 29 March 2019 — the effective rate. Effective 1 April 2019, the under-construction real estate GST regime was rationalised to 5% CGST for non-affordable housing and 1% CGST for affordable housing, both without ITC. The rate is a compounded rate that embeds a deemed 1/3rd deduction for the value of land. Because PLC is part of the composite, PLC attracts the same 5% (or 1%) effective rate.
Schedule III Entry 5 — the exit door. Sale of a building where the entire consideration has been received after the issuance of the completion certificate or after first occupation, whichever is earlier, is neither a supply of goods nor a supply of services. A ready flat sold post-CC attracts NIL GST — and by the composite-supply rule, PLC on a post-CC ready flat also attracts NIL GST. The under-construction vs post-CC cliff is the sharpest transition in real estate GST, and it applies to the full composite consideration including PLC.
A worked example — 25th-floor unit with ₹8 lakh PLC
Take an illustrative under-construction non-affordable project priced by an illustrative Macrotech (Lodha)-style developer. A 25th-floor 2,400-square-foot unit has:
| Line-item | Amount |
|---|---|
| Base consideration (2,400 sqft × ₹6,667/sqft) | ₹1,60,00,000 |
| Floor PLC (25th floor × ₹1,333/sqft × 2,400 sqft) | ₹3,20,000 |
| Park-facing view PLC (fixed) | ₹3,00,000 |
| Corner unit PLC (fixed) | ₹1,80,000 |
| Total composite consideration | ₹1,68,00,000 |
| GST at 5% on composite (2.5% CGST + 2.5% SGST) | ₹8,40,000 |
| Total including GST | ₹1,76,40,000 |
The composite GST invoice issued to the buyer at demand-letter stage shows five lines under HSN 9954 — base ₹1.6 crore, floor PLC ₹3.2 lakh, view PLC ₹3 lakh, corner PLC ₹1.8 lakh, and a single 5% CGST on the aggregate ₹1.68 crore = ₹8.4 lakh. The buyer’s Form 26QB TDS deduction under Section 393(1) Sl. 3(i) code 1010 (successor to legacy Section 194-IA) is 1% of ₹1.68 crore = ₹1,68,000 — computed on the full composite consideration because the composite is the “consideration for transfer of immovable property” under the TDS section.
In the developer’s books:
- Contract liability credited ₹1.68 crore (base + PLC combined per Ind AS 115 performance-obligation grouping)
- Revenue sub-ledgers split ₹1.6 crore to “base construction revenue” and ₹8 lakh to “PLC revenue” for internal MIS
- GST output tax ₹8.4 lakh credited to output-CGST/SGST liability
- Buyer receivable ₹1,76,40,000 gross, net of ₹1,68,000 26QB TDS = ₹1,74,72,000 net collectable
Every rupee flows through the composite-supply lens — the developer never books a “PLC service supply at 18%” line, never issues a separate 18% invoice for PLC, and never treats PLC as an out-of-scope premium.
Common reconciliation breakages
Split-classification legacy. Developers who classified PLC as a separate 18% service supply prior to Notification 3/2019-CTR sometimes carry that classification forward into new bookings by inertia. This over-collects GST from the buyer and the buyer’s counsel will contest it at possession. The reclassification is retrospectively risky — a refund claim on the excess 13% is time-barred and generally not entertained where the tax was collected from the buyer.
Post-CC PLC still being taxed. A project that received CC in Q4 of last year but continued to invoice new bookings with 5% GST on PLC creates a Schedule III Entry 5 exposure — those transactions should be NIL. This one goes the other way: the developer has collected GST that was never due, and the buyer will demand it back at closing.
Composite invoice missing PLC line. Some developers issue a “clean” composite invoice at the aggregate ₹1.68 crore level without breaking out the PLC lines. This is not a GST error per se — the 5% is being applied to the full composite — but it breaks the sale-deed to invoice reconciliation because the sale deed itemises PLC and the invoice doesn’t. RERA Form 4 progress report reconciliation then loses granularity.
PLC in RERA Form 4 aggregation. RERA Form 4 requires the developer to report customer collections tied to project construction status. PLC is part of the composite customer collection and belongs in the RERA 70% escrow pool along with the base consideration. Developers who segregate PLC into a “special charges” bucket outside escrow create a Section 4(2)(l)(D) exposure with the state RERA authority.
Buyer-side 26QB on base only. The buyer’s Form 26QB TDS filing at 1% must be on the composite consideration, not just the base. A buyer counsel that files 26QB on ₹1.6 crore (base only) instead of ₹1.68 crore (composite) creates a Form 26AS receivable gap for the developer — the developer’s tax credit is ₹1,60,000 instead of the ₹1,68,000 that should have been deducted.
GST on cancellation refund. If the buyer cancels post-booking and the developer refunds the base and PLC net of forfeiture, the GST treatment on the retained forfeiture is contested. Recent AAR rulings (e.g., Karnataka AAR on the “tolerating an act” argument under Section 15(2)) apply GST on the forfeiture amount — but the composite classification of PLC still applies to whatever portion is refunded and whatever portion is retained.
How a reconciliation platform handles this
Running composite-supply reconciliation across an under-construction project with 400+ units across multiple towers is a per-unit tie-out problem. Every unit has its own PLC schedule based on floor, view, orientation and any corner or vastu premium; every unit’s booking form, sale deed, composite GST invoice, buyer-side 26QB filing and Form 26AS credit must tie back to the developer’s contract-liability ledger; and the quarterly RERA Form 4 progress report must aggregate customer collections that already include the PLC line-item inside the 70% escrow discipline.
Purpose-built real estate reconciliation software India treats each unit as a reconciliation entity with a per-unit event log — booking form, demand letters, composite GST invoices, customer payments, buyer TDS deductions, Form 26AS credits, escrow deposits, RERA filings. The system carries a composite-supply preset that classifies PLC / floor-rise / car parking / common-area charges as bundled with the principal per CBIC Circular 197/09/2023-GST and applies the effective rate (5% / 1% / NIL) based on project construction status. It ties the PLC line on the sale deed to the PLC line on the composite invoice to the PLC sub-ledger revenue posting and surfaces variance at any level. TransactIG carries these presets alongside RERA escrow reconciliation, buyer-side 26QB matching, and quarterly Form 4 progress report tie-back. Customer outcomes include match-rate improvement from 51% to 88%, with build in two-to-four weeks on AWS Mumbai (ISO 27001:2022). For the broader reconciliation software India view of how per-unit event logs roll up into project-level and portfolio-level control, the same event-driven architecture applies.
Continue reading — Real estate cluster
- Car parking charges GST treatment for real estate — composite supply, right to use vs sale, same CBIC Circular 197/09/2023 anchor
- Completion certificate flat sale — no GST — Schedule III Entry 5 exit door and the under-construction vs post-CC cliff
- Real estate developer revenue recognition under Ind AS 115 — POC computation, performance-obligation grouping for base plus PLC
- RERA escrow account reconciliation India — 70% pool, engineer + architect + CA certification, Form 4 progress report
- TDS on property purchase under Section 194-IA / Section 393 successor — 1% buyer deduction on composite consideration above ₹50 lakh
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →
- ▸ CGST Act 2017 — Section 8 (composite and mixed supply) — Section 8(a) — composite supply is treated as a supply of the principal supply and taxed at the rate applicable to the principal supply
- ▸ CGST Act 2017 — Schedule II Entry 5(b) — Schedule II Entry 5(b) — construction of a complex, building, civil structure intended for sale to a buyer, wholly or partly, is a supply of service
- ▸ Notification 3/2019-Central Tax (Rate) dated 29 March 2019 — 5% CGST for under-construction non-affordable housing, 1% CGST for affordable housing, no ITC — effective 1 April 2019
- ▸ CBIC Circular 197/09/2023-GST dated 1 August 2023 — Clarifies that charges for preferential location, floor-rise, right to use car parking space, and common areas collected by a promoter along with the consideration for construction service constitute a composite supply and attract the same GST rate as the principal supply
- ▸ Schedule III Entry 5 — CGST Act 2017 — Sale of building after issue of completion certificate or after first occupation is neither a supply of goods nor a supply of services — no GST on ready flats