In a bid to provide the big relief to the Home buyers, the GST Council slashed tax rates on under-construction housing properties to 5 per cent without input tax credit, from the existing 12 per cent. To boost the residential segment of the real estate sector, many recommendations were made by the GST Council in its 33rd meeting held on Sunday.
According to Finance Minister Arun Jaitley, GST shall be levied at effective GST rate of 5% without ITC on residential properties outside affordable segment; GST shall be levied at effective GST of 1% without ITC on affordable housing properties. The new rate shall become applicable from 1st of April, 2019.
A residential house/flat of carpet area of upto 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value upto Rs. 45 lacs (both for metropolitan and non-metropolitan cities).
Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).
GST exemption on TDR/ JDA, long term lease (premium), FSI: Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable.
Details of the scheme shall be worked out by an officers committee and shall be approved by the GST Council in a meeting to be called specifically for this purpose.
GST Council decided that the issue of tax rate on lottery needs further discussion in the GoM constituted in this regard.
The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.
Needless to say, real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of slowdown in the sector and low off-take of under-construction houses which needs to be addressed.
Post a Comment