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GST on Homes: GoM for 5% tax on under-construction property, 3% on affordable housing
GST on Homes: The Group of Ministers (GoM) has cleared a proposal to reduce GST on under-construction residential properties to 5%, from the current 12 percent, Zee Business TV reports.
GST on Homes: The Group of Ministers (GoM) has cleared a proposal to reduce GST on under-construction residential properties to 5%, from the current 12 percent, Zee Business TV reports. On Friday, the panel of state ministers favoured lowering GST on under-construction residential properties to 5 per cent. The Group of Ministers chaired by Gujarat Deputy Chief Minister Nitin Patel was set up in January to analyse tax rates and issues/challenges faced by the real estate sector GST regime. The GoM has favoured reducing the rate in its first meeting. The GoM has also favoured slashing GST on affordable housing from 8 per cent to 3 per cent.
The report of the GoM would be finalised within a week. It may be placed before the GST Council in its next meeting. "The GoM favoured lowering GST rates on residential houses to 5 per cent without input tax credit and to 3 per cent for those under affordable housing," news agency PTI quoted an official as saying.
At present, GST is levied at 12 per cent with Input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.
There were complaints that builders were not passing on the ITC benefit to consumers by way of reduction in the price of the property after the rollout of GST.
In its meeting last month, the GST Council had decided to set up a GoM to look into ways to boost the housing sector under GST.
Other ministers in the 7-member GoM are finance ministers of Maharashtra Sudhir Mungantiwar, Karnataka Krishna Byre Gowda, Kerala Thomas Isaac, Punjab Manpreet Singh Badal, Uttar Pradesh Rajesh Agarwal and Goa Panchayat Minister Mauvin Godinho.
Apart from Patel and Gondinho, Friday's GoM meeting was attended by Mungantiwar and Badal through video conferencing. Also other state ministers, who are part of the panel, too would be giving their views in a couple of days.
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