By now we have realized that after the 34th GST board meeting, the government has effectively offered approval to the new GST rates on the Real estate division. The GST panel had chosen to make the new GST rates on housing division compulsory from April 2019.
On the other hand, the realtors and the developers having GST registration were specified a one-time choice to make their mind up on one of the 2 alternatives, either old or new GST tariff rates on housing sector.
The Ministry of Finance has now set the due date for settling on a decision between the past and modified GST rates on real estate till tenth May 2019.
1. What rule has the government made about the new GST on housing rate?
The Finance Ministry of India has now obviously informed that Real estate developers having GST registration would now be able to make a smart choice between the old & the reframed GST rate just till May 10, 2019. On the off chance that they neglect to take benefit of this scheme, they will be basically be deemed to have shifted to the new GST rates.
2. What can be the possibility that the producers settle on old GST rates?
At the 33rd GST Council meeting a month ago,
- It was obviously clarified how the old and overhauled GST rates would apply on the real estate ventures.
- On the off chance that the realtors having GST registration settle on the 12% GST rate on under development property, they will almost certainly guarantee an input tax credit (ITC).
- In the event that they choose the 5% GST rate they won’t almost certainly guarantee input tax credit.
- Essentially, on account of the affordable housing segment, the old 8% GST rate can be selected with input credit available, while the reframed 1% GST rate can be taken without ITC.
3. What is the exact meaning of affordable house?
After the 33rd GST Council meeting, the meaning of the word “affordable” housing was in addition re-phrased. According to the new explanation the pads of significant worth up to ₹45 lac and having a rug region of up to 60 sqm in level I urban communities and 90 sqm in the event of level II urban communities, are considered as affordable houses. The level I urban areas are as per the following-
4. Which different actions are taken by government in regards to GST on housing?
There are some extra remedial steps taken by the command viewing GST on housing. Those are as per the following-
- The Central Board of Indirect Taxes and Customs (CBIC) vide another notice, has coordinated the real estate builders who have got GST registration and will relocate the new GST rates.
- Now, they shall get ready to maintain new books of records with respect to the GST input credit.
- They need to reimburse the surplus of input credit of GST utilized, to the legislature inside 24 simple EMIs.
- Moreover, the CBIC has guided the companies to set up a task friendly record of internal supplies (buys) from every one of the providers who are having GST registration and even those individuals who are unregistered still.
To support demand in the real estate sector, the GST Council, on February 24, 2019, cut GST rates for under-development homes to five per cent and affordable homes to one per cent, valid from April 1, 2019. Currently, the Goods and Services Tax (GST) is charged @ 12 per cent with input credit (ITC) on payments made for under-development property or ready to move in homes, where the completion certificate isn’t issued at the time of sale. For affordable apartment units, the existing tax rate is eight per cent.