In a huge relief to middle-class homebuyers, GST Council chaired by the Finance Minister Arun Jaitley on Sunday announced that now the individuals will only have to pay five per cent GST on under-construction flats instead of 12 per cent.
In a huge relief to middle-class homebuyers, GST Council chaired by the Finance Minister Arun Jaitley on Sunday announced that now the individuals will only have to pay five per cent GST on under-construction flats instead of 12 per cent.
In a media briefing, Arun Jaitley further said that the affordable housing will atract one per cent GST. Earlier, it was 8 per cent.
"We've adopted twin definition of affordable housing. One on basis of carpet areaand second on cost. In metros,60 sq m carpet area and Rs45 lakh cost of apartment to fall in affordable housing. However, in non-metros,it'll be 90 sq m carpet and Rs 45 lakh cost", Jaitley said.
The new rates will come into effect from April 1, 2019.
Currently, premium housing attracts 12% GST while an effective rate of 8% is applicable on the affordable housing segment for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. The GST, however, is not levied on the properties where the completion certificate has been issued.
There have been complaints filed with the National Anti-Profiteering Authority (NAA) that the builders have not been passing the GST benefit of the ITC to the homebuyers.
This is likely to give a boost to the under-construction housing segment which has not been attracting customers as such properties had become costlier as compared to finished ones that didn't attract GST, said experts.
"If the GST rate is brought down to 5% from 12%, it will be good for homebuyers as well as builders. It will also be simpler to calculate the tax without ITC," Anuj Puri, chairman of Anarock Property Consultants had earlier said to DNA Money.
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