In a big relief to real estate sector, the GST Council on Sunday slashed tax rates of under-construction housing properties to 5 percent without input tax credit (ITC), from the existing 12 percent.
Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of a slowdown in the sector and low off-take of under-construction houses which needs to be addressed. To boost the residential segment of the real estate sector, the following recommendations were made by the GST Council in its 33rd meeting held on Sunday.
GST shall be levied at an effective rate of 5% without ITC on residential properties outside the affordable segment.
GST shall be levied at effective GST of 1% without ITC on affordable housing properties.
The new rate will be applicable from the 1st of April, 2019.
