Goods and Services Tax (GST) will not be applicable for real estate properties which are issued with a completion certificate during the sale, said Finance ministry on Saturday (8 December), in a move to reduce the tax burden.
However, properties under construction and ready to move in flats without the completion certificate will still attract GST during the sale, reported Live Mint.
Builders have been urged by the ministry to reduce prices and pass on benefits of lower GST rates to customers.
For affordable housing projects such as Jawaharlal Nehru National Urban Renewal Mission, Pradhan Mantri Awas Yojana and other schemes of state government, 8 per cent GST will be levied. Builders can adjust that tax with an accumulated input tax credit (ITC). Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.
“For such (affordable housing) projects, after offsetting ITC, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST,” said the ministry.
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