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Big Boost For Real Estate: GST On Under-Construction Properties May Be Slashed From 18 To 5 Per Cent, Says FM
Finance Minister Piyush Goyal (Arvind Yadav/Hindustan Times via Getty Images)
Union finance minister Piyush Goyal has stated that a meeting of the GST council has been called to consider the recommendations of a ministerial panel on reducing the GST tax rates on under-construction properties, reports Mint.
“A meeting of the GST Council has been called. I hope the consensus arrived at by the GST Council committee will be agreeable to all of you. It will be beneficial to all of you," said the minister.
A ministerial panel, headed by Gujarat deputy chief minister Niti Patel suggested to lower goods and services tax (GST) on under-construction real estate projects from the current 18 per cent to 5 per cent.
However, though GST on under-construction houses is 18 per cent, it works out 12 per cent with abatement available for land and input tax credit (ITC) on the tax paid on steel, cement, paint and other inputs. For affordable housing, the tax stands at 12 per cent but again due to the abatement the effective rate of tax comes down to 8 per cent.
Might Go Up Too
Goyal noted that the duties might also go up marginally in some cases. “But I urge you to accept (the Council’s decision). It is also in your interest. It is in the interest of the nation, and of your business,” the minister added.
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