GST rates on under construction flats cut

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GST rates on under construction flats cut

The new tax rates will come into effect from April 1, 2019

Sunday February 24, 2019 7:50 PM, ummid.com News Network

New Delhi: The Goods and Services Tax (GST) Council on Sunday slashed tax rates on under-construction housing properties to 5% without Input Tax Credit (ITC), from the existing 12%.

The GST Council further slashed GST rates on affordable housing to 1% from the current 8% and expanded the scope of affordable housing to those costing up to Rs 45 lakh and measuring 60 sq metre in metros and 90 sq metre in non-metro cities.

"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", Ministry of Finance said Sunday.

The new tax rates will come into effect from April 1, 2019.

Affordable housing means 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).

The GST Council also announced tax 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", the ministry said.

The ministry said the decision has been taken to boost the residential segment of the real estate sector after the reports of slowdown in the sector and low off-take of under-construction houses.

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