GST Council 33rd Meeting – Recommends Relief to Real Estate Sector
On 24 Feb 2019, Sunday GST Council’s 33rd meeting was held. This meeting was originally adjourned on 20 Feb, 2019.
In this council’s meet, major tax relieving decision was undertaken for the real estate sector. As this sector contributes a major portion of the nation’s GDP also, it helps in generating a number of employment opportunities. Hence, becoming a key area on which consideration is required.
GST at the following rates have been prescribed to be made effective from 1 April 2019,
- Goods and Service Tax @ 5% shall be levied on the residential properties falling outside the purview of affordable housing. And,
- GST @ 1% shall be levied on affordable housing projects
No input tax credit shall be available on the above GST amount paid.
Now, let us understand what does affordable housing mean?
Affordable housing means
- Carpet area of upto 90sqm in non-metropolitan cities or town
- Carpet area of upto 60sqm in metropolitan cities
The money value in both cases shall not exceed Rs 45 Lacs.
Metropolitian Cities are:
- Mumbai and
- Delhi NCR
(Restricted to Delhi, Noida, Greater Noida, Gaziabd, Gurgaon, Faridabad)
What is the GST exemption on JDA, FSI, and lease?
The residential property on which GST is payable shall be free from immediate development rights taxes like JDA, FSI, long term lease premium etc.
By making the above-stated recommendations GST council has taken a step ahead to “Housing for all by 2022”. Also, the prescribed GST rates will boost
- The residential segment of the real estate sector
- Address slow down in the real estate sector etc
- Housing for every citizen of India and
- Make cities free of slums
To read more about 32nd GST Council Meet and the recommendation for constitution of committee to look after real estate sector read our article below.