If you earn brokerage on property deals, your fee is a taxable supply of services under GST. This article covers the classification, the rate, registration, and the one question co-broking adds: who charges GST to whom when two brokers share a fee.
The SAC code for brokerage
Services are classified under GST using the Scheme of Classification of Services, published as the annexure to Notification No. 11/2017-Central Tax (Rate). Real estate services are Heading 9972. Within it, Group 99722 is "Real estate services on a fee or commission basis or on contract basis", with these codes:[1]
| Code | Description |
|---|---|
| 997221 | Property management services on a fee or commission basis or on contract basis |
| 997222 | Building sales on a fee or commission basis or on contract basis |
| 997223 | Land sales on a fee or commission basis or on contract basis |
| 997224 | Real estate appraisal services on a fee or commission basis or on contract basis |
The GST Council's Explanatory Notes say 997222 includes real estate agency and brokerage services related to buildings, and similar intermediation services involving buying, selling and renting of buildings and associated land, on a fee or contract basis. 997223 covers agency and brokerage for the sale of vacant land.[2] So brokerage on a flat, house or shop, whether for a sale or a rental, falls under 997222, and brokerage on a plot of land under 997223.
The rate: 18%
Notification No. 11/2017-Central Tax (Rate), entry 16(iii), covers "Real estate services other than (i) and (ii) above" under Heading 9972. Entries (i) and (ii) are specific land leases; brokerage falls in (iii). The rate is 9% CGST and 9% SGST or UTGST, which is 18% in total, or 18% IGST on an inter-State supply.[3]
The 56th GST Council meeting changed the rates of several services with effect from 22 September 2025. Heading 9972 is not in its list of service rate changes,[4] so brokerage stayed at 18%.
Example. A broker in one State earns a brokerage of ₹1,00,000 from a client in the same State. The invoice shows ₹1,00,000 plus CGST of ₹9,000 and SGST of ₹9,000, a total of ₹1,18,000. GST is charged on the broker's fee, not on the price of the property.
When a broker has to register
Under section 22 of the CGST Act, a supplier must register in the State from which they make taxable supplies once their aggregate turnover in a financial year exceeds twenty lakh rupees. The threshold is lower in special category States.[5] Turnover here is your total brokerage and other taxable supplies, not the value of the properties you sell. Check the current threshold for your State on the GST portal or with your CA, because there are cases where registration is required regardless of turnover.
GST when two brokers share one fee
Co-broking adds one decision: who invoices whom. Put the answer in your co-broking agreement.
- Each broker bills their own client. If the seller pays the listing broker and the buyer pays the buyer's broker, each broker charges GST on their own fee and no invoice passes between the brokers.
- One broker collects and pays the other. If one broker collects the whole fee and pays the other broker's share, a GST-registered co-broker invoices the collecting broker for that share, with GST on it. A registered collecting broker may be able to take input tax credit for that GST, subject to the conditions in the GST law, which include possession of a tax invoice.[6]
Whichever model you use, agree that the split is calculated on the fee before GST. Each broker then accounts for GST on their own invoice, and nobody argues about whether 18% was "included". How to split commission between two brokers has a worked example.
What this article does not cover
GST has more to it than a single rate: place of supply when the client is in another State, the composition scheme, invoicing rules, and the timing of tax on advances. Those depend on your registration and your business, so take them to a CA.