Revised GST for under-construction flats explained - Hindustan Times
close_game
close_game

Revised GST for under-construction flats explained

Hindustan Times, Lucknow | ByHT Correspondent
May 26, 2019 10:21 AM IST

The new rates came into force from April 1 after the GST Council in March approved the proposal in this regard with a view to boosting demand in real estate sector.

The commercial tax department has issued a letter to all its officials and traders’ bodies briefing them on the downwardly revised GST rates on under-construction flats, besides addressing the frequently asked questions.

The new rates are applicable to all projects which commenced on or after April 1, 2019 as well as for on-going projects(Sunil Ghosh / Hindustan Times)
The new rates are applicable to all projects which commenced on or after April 1, 2019 as well as for on-going projects(Sunil Ghosh / Hindustan Times)

The new rates came into force from April 1 after the GST Council in March approved the proposal in this regard with a view to boosting demand in real estate sector.The letter, issued only a few days ago by additional commissioner, GST, Vivek Kumar, says that with effect from April 4 the GST rate for construction of affordable residential flats and apartments is 1%, and 5% for all flats and apartments other than affordable ones.

Hindustan Times - your fastest source for breaking news! Read now.

The new rates are applicable to all projects which commenced on or after April 1, 2019 as well as for on-going projects.

Prior to April 1, 2019, the Goods and Services Tax (GST) was levied at 12% with input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats, where the completion certificate was not issued at the time of sale. For affordable housing units, the tax rate was 8%.An affordable residential apartment, the letter clarifies, is an apartment in a project that commenced on or after April 1, 2019, or in an ongoing project in respect of which the promoter has opted for new rate of 1%, having carpet area of up to 60 square metres in metropolitan cities and 90 square metres in cities or towns other than metropolitan cities and the gross amount charges for which, by the builder, is not more than 45 lakh.

The promoter or builder also has the option of paying the tax on old rates in case of on-going projects. But no such option is available on projects that began on or after April 1, 2019, the letter clarifies.A residential real estate project, it further clarifies, means a ‘real state’ project’ in which the carpet area of the commercial apartment is not more than 15% of the total carpet are of all the apartments in the project.

SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Wednesday, March 06, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On