GOM to reduce GST rates to 3% and 5% respectively in affordable and in other categories

A ministerial panel headed by Gujarat Deputy Chief Minister Nitin Patel will finalise a report that is expected to give boost to the real estate sector under Goods and Services Tax (GST) by making under-construction residential houses cheaper. “GOM likely to announce GST on under construction homes at 5 %, Affordable Homes at 3 %, should result in increased off-take in under construction homes,” Dr.Niranjan Hiranandani It is learnt that the panel has indicated 5 percent GST on under-construction residential houses and 3 percent tax in case of affordable housing category. However, in both cases, input tax credit (ITC) cannot be claimed. ShishirBaijal, Chairman & Managing Director, Knight Frank, “The reported recommendation from GoM to reduce GST rates to 3% and 5% respectively in affordable and in other categories, will breathe a new life in to the sector. The existing GST regime has been a major deterrent for sales in under-construction projects. This could be a vital link in the recent chain of events, which include incentives of the interim budget and the rate cut by MPC. We await the decision of the GST council and hope that the recommendations are accepted.” The Group of Ministers (GoM) for boosting real estate sector under GST regime met at North Block and is in its last stage to finalise the report that will be submitted to the GST Council for its final approval.