HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
GST Council gives go-ahead to new tax provisions for housing units
Mar-20-2019

With an aim to boost real estate sector, the Goods and Services Tax (GST) Council has approved a transition plan for the implementation of new tax structure for housing units. Consequently, it has decided that builders can pick between paying 12% for non-affordable houses with input tax credit (ITC) benefits or 5% without the tax rebates for under-construction houses. Likewise, for affordable housing projects, builders can choose between 8% with tax rebates or 1% without it. The new rates, without ITC benefits, will apply for all projects that begin construction only after April 01, 2019.

The meeting deliberated on the transition provision and related issues for the implementation of lower GST rates for the real estate sector. Reasonable time for transition will be given to developers in consultation with states.

In its last meeting on February 24, 2019, the Council had lowered the GST rate to 1% from 8% for affordable houses and to 5% from 12% for other houses. The new rates will kick in from April 01, 2019, but builders will not be eligible to claim ITC benefits after the lower duties come into force.

  RELATED NEWS >>