High expectations from GST Council meeting
Chaired by finance minister ArunJaitley, the 32nd meeting of the GST Council today is expected to discuss issues relating to a rate cut in under-construction flats and cement industry. After the last council meeting in December, Jaitley had said that the next meeting would consider rationalisation of tax rates on residential properties and raising the threshold limit for MSMEs from the current Rs 20 lakh. “We are quite optimistic about the revision of GST rates on residential properties. However, NAREDCO as a body wishes to have input tax credit, as the absence of the same will lead to steep rise in the price which will majorly hit the affordable segment, thus having a direct impact on the central govt's dream of " Housing for all by 2022". We are looking forward for a 12% tax bracket with abetment of 50% for land cost and other premiums, effectively bringing the tax Rate at 6% with ITC. Moreover, we are also expecting a revision on the GST as it will largely help in converting the fence-sitters into sales and drive home a positive sentiments”, expresses RajanBandelkar, President, NAREDCO West “The expected lowering of GST on under-construction flats and houses to 5%, as well as hiking exemption threshold for MSMEs by the GST Council would be a welcome move, and pro-industry initiative taken by the government. We will have to watch and see as to how this move pans out and its possible implications in the long run. However, the general sentiment within the real estate fraternity is upbeat, with the move likely to set the industry on an optimistic path.” Said Sankey Prasad, Chairman and Managing Director, Synergy Property Development Services The GST Council is likely to consider lowering Goods and Services Tax (GST) on under-construction flats and houses from 12% at present to 5% without an input tax credit. CMD Tulip InfratechParveen Jain states in light of the GST Council meeting,’ In today’s GST council meeting, there was no decision on GST rate cut and it has been postponed for the next meeting. If the GST rate is brought down to 5% on under construction residential Real estate projects without extending the benefit of Input tax credit, sale prices may increase. If the Input tax credit is not allowed, then it may impact the under construction Affordable Housing segment also with an increase in price of the same. Hence Input tax credit should be allowed on under construction residential projects even after GST is reduced to 5%.’
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