GST Council Reduced Tax Slabs for Under Construction Real Estate Projects
The GST Council slashed tax rates on under-construction housing properties to 5 per cent without the input tax credit, from the existing 12 per cent.
GST shall be levied at an effective GST rate of 5% without ITC on residential properties outside the affordable segment, an official statement said.
GST shall be levied at effective GST of 1% without ITC on affordable housing properties, it added.
The new rate shall become applicable from 1st of April, 2019
“This (GST reduction) decision will certainly give a boost to the construction sector,” Finance Minister Arun Jaitley told reporters on the development.
The new tax rate in principle was approved by the Council taking into consideration that the buyer of the house gets a fair price and affordable housing gets very attractive with GST @ 1%.
Also, the interest of the buyer/consumer gets protected; ITC benefits not being passed to them shall become a non-issue, said the statement.