The Goods and Services Tax Council on Sunday slashed tax rates on under-construction housing properties to 5% without an input tax credit, from the existing 12%. The news has come out as a big relief to home buyers and the homes have now become cheaper. The Union Finance Minister, Arun Jaitley announced that the council has cut the GST rates on affordable housing to 1% from the current 8% and expanded the scope of affordable housing to those costing up to Rs. 45 lakh measuring 60 s. mt. in metros and 90 sq. mt. in non-metro cities. The new tax rates will come into effect from 1st April 2019.
Currently, GST is levied at 12% on payments made for under construction property and ready to move in flats, and in cases where completion certificate is not issued at the time of sale. No tax is levied in cases where completion certificate has been issued at the time of sale.
The Goods and Services Tax Council headed by Arun Jaitley, decided on cutting tax rates on under-construction housing property after due consideration to reports of a group of ministers on real estate sector. The GST council meeting had remained indecisive on Wednesday and was adjourned for Sunday.