GST Council cuts rates on under construction properties

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The BJP-led central government in a major ‘bonanza’ to the people of the country announced rate cuts for the under construction properties, considered a move to seek the favour of the middle class section of the country.

The Goods and Services Tax Council gave its nod to lower the tax rate on under-construction properties to 5 percent, from the previous 12 percent. Affordable housing projects will be charged 1 percent tax. The definition of what constitutes affordable housing has been changed. However, developers won’t be allowed to claim input tax credit.

It was also decided in the meeting that Residential property priced at Rs 45 lakh or below will be considered ‘affordable’ and taxed at 1 percent, from the previous 8 percent. Under-construction properties priced over Rs 45 lakh will invite 5 percent GST, versus the previous  12 percent. Property will be considered affordable if it is 90 sq. metres in metro cities and 60 sq. metres in non-metro cities. As said by Sushil Modi, FM, Bihar.

The rate cuts will come into effect from 1st April, 2019.

Finance Minister, Arun Jaitley on 24th February ,headed the meeting along with the Finance Ministers of various states and Union Territories.

The meeting was chaired by Finance Minister Arun Jaitley who had adjourned the Feb. 20 meeting in Delhi after some states had expressed apprehensions over making rate decisions for the real estate over video conferencing.

Previously, The GST Council had extended the deadline for businesses to file sales returns for January till Feb. 22. The last day for filing GSTR-3B returns was Feb 20. Due to disturbance in Jammu and Kashmir, Jaitley said the council decided to extend the last date for filing GSTR-3B returns in the state to Feb. 28.

In response to the decision taken, several BJP leaders took to twitter to express their thoughts and applaud PM Narendra Modi.

The revisions came under the “Housing for All by 2022” vision of the government which sees every citizen having a house of their own and urban areas free from slums.

Also, there has been considerable tax relief – both for the salaried middle class and small and medium enterprises – in the interim budget announced earlier.

 

 

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