GST Council Approves 5% Rate for Under Construction & 1% for Affordable Housing Properties

The 33rd Goods and Services Tax ( GST ) Council meeting in New Delhi has made some important decisions regarding the real estate sector. Reportedly, the Council has approved the lowest rate of 1% tax on the affordable houses, sources said. According to sources, the non-affordable houses will be charged at 5% GST without the input tax credit. The council has also recommended in relaxing the definition of affordable houses to grant relief. In metro cities, houses with a carpet area up to 60 sq meter will be classified under affordable housing In non-metro cities, houses with a carpet area of up to 90 sq meters will be classified under affordable housing. These changes would be applicable from 1st April 2019. “For affordable housing GST rate reduced from 8 to 1 % & for non affordable from 22 to 5 % without ITC. Definition of affordable changed to 90 & 60 sq mtr for non metro & metro with a capping of 45 Lakh for both,” Bihar Minister Sushil Kumar Modi tweeted. Reportedly, the Council is also considering to lower the tax rate on under-construction flats. Though the Council met on Thursday through video conference, to discuss the proposal, it was deferred to Sunday, some states had opposed announcing of the decision in their absence in the last meeting. The meeting is also expected to address the issue of the tax rate on the lottery. A panel headed by Maharashtra finance minister Sudhir Mungatiwar has recommended a uniform rate of 18 percent or 28 percent on the lottery

Source

https://www.taxscan.in/