A Group of Ministers (GoM) led by Gujarat deputy chief minister Nitin Patel would look into the ways to rationalise Goods and Services Tax (GST) rate for the real state sector and suggest a composition scheme to boost it.
The GST Council, which met last week, decided to form a seven-member panel to boost the real estate sector under the new tax regime.
As per the Terms of Reference (ToR) of the GoM decided by the GST Council headed by finance minister Arun Jaitley, the "GoM would analyse tax rate of GST, including issues and challenges in view of proposal for boosting the real estate sector by providing a composition scheme for residential construction units. It will also examine and suggest ways to implement a composition scheme or any other scheme."
The panel will look into the issue of the legality of inclusion or exclusion of land or any other ingredient in the composition scheme and suggest valuation mechanism. It will also examine various aspects of the GST levy on Transfer of Development Rights (TDR) and development rights in a joint development agreement and suitable model.
Currently, GST on the under-construction flats and houses is 12% whereas ready-to-move-in flats with a completion certificate attract no GST. There are also complaints about the builders not passing on the benefit of input tax credit (ITC) to the consumers.
While the GST Council in its last meeting on January 10 was expected to take a decision on reducing the tax on the under-construction houses to 5%, the matter could not be decided due to lack of consensus. It was subsequently referred to the GoM.
"There was a divergence of opinion on real estate issues. The seven-member GoM will be constituted to find convergence on real estate issues. The recommendations of the GoM on real estate will be considered in the next GST Council meeting," Jaitley had told media after the meeting.
The Council's law and fitment committee will assist the panel. The officers from the Centre and states can also be invited in the committee for inputs, if required, the finance ministry statement said.
The other ministers on the panel on the real estate sector constituted on Tuesday include finance minister (FM) of Maharashtra Sudhir Mungantiwar, Karnataka FM Krishna Byre Gowda, Kerala FM T M Issac Thomas, Punjab FM Manpreet Singh Badal, UP FM Rajesh Agarwal and Goa minister Mauvin Godinho.
CONCRETE GAINS
- The seven-member Group of Ministers is led by Gujarat deputy chief minister Nitin Patel
- Among other things, the GoM will examine various aspects of the GST levy on TDR
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Real Estate")
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}