GoM on GST on housing submits recommendations to council
The Council might also consider reducing tax on cement from 28 per cent to 18 per cent to boost the realty sector.
A Group of Ministers (GoM) headed by Gujarat Deputy Chief Minister Nitin Patel which has favoured 3 per cent tax on the affordable housing category, down from 8 per cent, has submitted its report to the GST Council for taking it up and decide on it by Wednesday.
The Council, in its meeting on Wednesday, might also consider reducing tax on cement from 28 per cent to 18 per cent to boost the realty sector.
The proposed Goods and Services Tax (GST) cut in cement and the GoM report are on the agenda of the meeting, sources said, adding that the government is looking at the housing sector closely ahead of the coming Lok Sabha elections.
Another ministerial panel set up to review tax rate on lottery favoured a uniform GST rate but whether it is 18 or 28 per cent, a final call would be taken at the meeting.
Currently, a state-organised lottery attracts 12 per cent GST while a state-authorised lottery attracts 28 per cent tax.
Wednesday's meeting could also change the definition of affordable housing to accommodate more poor people under a 3 per cent tax rate.
Currently, affordable houses are defined up to 50 square metres of carpet area which is likely to be increased to 80 square metres to include more people in the category. Developers and prospective home buyers are expected to gain from this move.
The panel set up to look into GST-related issues of the real estate sector is also said to have recommended GST for under-construction residential properties at 5 per cent, down from 12 per cent currently.
But it claimed that input tax credit (ITC) would no longer be possible on such transactions.
GST is currently levied at 12 per cent on premium housing and 8 per cent on affordable housing on payments made for under-construction properties where completion certificate has not been issued at the time of sale.
No GST is charged if a property is bought after the issue of completion certificate.
Recently, then Finance Minister Piyush Goyal had said the government was considering giving relief to the real estate sector and the next GST Council meeting (February 20) could take some steps to address their issues.
The real estate market is looking to get GST intervention to come out of the slump and multiple tax issues.
The government is in the process of handing out a big pre-election bonanza to property developers and buyers by reducing GST on under-construction houses, from 12 per cent to 5 per cent.
GST on affordable housing, meanwhile, will only be 3 per cent.
The meeting is also expected to take up and pass these proposals.
Under-construction houses currently attract 12 per cent GST and 6 per cent stamp duty and registration.
A Group of Ministers (GoM) headed by Gujarat Deputy Chief Minister Nitin Patel which has favoured 3 per cent tax on the affordable housing category, down from 8 per cent, has submitted its report to the GST Council for taking it up and decide on it by Wednesday.
The Council, in its meeting on Wednesday, might also consider reducing tax on cement from 28 per cent to 18 per cent to boost the realty sector.
The proposed Goods and Services Tax (GST) cut in cement and the GoM report are on the agenda of the meeting, sources said, adding that the government is looking at the housing sector closely ahead of the coming Lok Sabha elections.
Another ministerial panel set up to review tax rate on lottery favoured a uniform GST rate but whether it is 18 or 28 per cent, a final call would be taken at the meeting.
Currently, a state-organised lottery attracts 12 per cent GST while a state-authorised lottery attracts 28 per cent tax.
Wednesday's meeting could also change the definition of affordable housing to accommodate more poor people under a 3 per cent tax rate.
Currently, affordable houses are defined up to 50 square metres of carpet area which is likely to be increased to 80 square metres to include more people in the category. Developers and prospective home buyers are expected to gain from this move.
The panel set up to look into GST-related issues of the real estate sector is also said to have recommended GST for under-construction residential properties at 5 per cent, down from 12 per cent currently.
But it claimed that input tax credit (ITC) would no longer be possible on such transactions.
GST is currently levied at 12 per cent on premium housing and 8 per cent on affordable housing on payments made for under-construction properties where completion certificate has not been issued at the time of sale.
No GST is charged if a property is bought after the issue of completion certificate.
Recently, then Finance Minister Piyush Goyal had said the government was considering giving relief to the real estate sector and the next GST Council meeting (February 20) could take some steps to address their issues.
The real estate market is looking to get GST intervention to come out of the slump and multiple tax issues.
The government is in the process of handing out a big pre-election bonanza to property developers and buyers by reducing GST on under-construction houses, from 12 per cent to 5 per cent.
GST on affordable housing, meanwhile, will only be 3 per cent.
The meeting is also expected to take up and pass these proposals.
Under-construction houses currently attract 12 per cent GST and 6 per cent stamp duty and registration.
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