33rd GST COUNCIL MEETING

Feb. 25, 2019

To boost the residential segment of the real estate sector, the GST Council in its 33rd meeting made the following recommendations.

Recommendations made: 

  • GST rate: 
    • GST shall be levied at effective GST rate of 5% without Input Tax Credit (ITC) on residential properties outside affordable segment; 

    • GST shall be levied at effective GST of 1% without ITC on affordable housing properties. 



  • Effective date: The new rate shall become applicable from 1st of April, 2019. 

  • Definition of affordable housing shall be: 
    • A residential house/flat of carpet area of upto 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value upto Rs. 45 lacs (both for metropolitan and non-metropolitan cities). 

    • Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR). 



  • GST exemption on TDR/ JDA, long term lease (premium), FSI: Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable. 

Advantages of the recommendations made:

  • Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. 

  • “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of slowdown in the sector and low off-take of under-construction houses which needs to be addressed. 

  • To boost the residential segment of the real estate sector, the above-mentioned recommendations were made by the GST Council in its 33rd meeting. 

  • The buyer of house gets a fair price and affordable housing gets very attractive with GST @ 1%. Tax structure and tax compliance becomes simpler for builders. 

 

Source : PIB