On Sunday, the GST Council has offered a big relief to home buyers by slashing tax rates to 5 percent without input tax credit on under-construction housing properties, from existing 12 percent tax rates, said Finance Minister Arun Jaitley. The Council has further cut CGT rates on affordable housing to 1 percent from existing 8 percent and expanded the scope of affordable housing to those cost up to Rs. 45 lakh and measures 90 sq.meter in non-metro cities, and 60 sq.metre in metro cities.
Therefore, from April 1, 2019, the new tax rates will come into effect. Presently, the GST is imposed at 12 percent in payments madder for ready-to-move-in flats or under-constructed properties where the certificate of completion has not been issued at the time of sale.
However, under the latest GST rates, builders will not be able to claim ITC (Input Tax Credit).
Mr. Jaitley told the source that “this (GST reduction) decision will certainly give boost to construction sector.” Although, GST is not imposed on real estate properties for which certificate of completion has been issued at the time of sale.
With regard to lotteries, the GST Council has deferred its option with the Finance Minister saying that the GoM (Group of Ministers) will again meet to discuss the proposal. Presently, the state-run lotteries attract a GST rate of 12 percent, while state-authorized ones imposed 28 percent rates.