Real Estate is one of the largest contributions to the National GDP and provides Employment opportunity to a large number of people “Housing for All By 2022” envision that every citizen would be free of Slums. There is a report of Slow down in the sector and the low of taking under constriction houses which Need to be Addressed to boost the Residential segment of the Real Estate sector, following Recommendation was made by GST COUNCIL MEETING held 24th Feb 2019.
1. GST Rate:
(A) Gst Shall be levied at an effective rate of 5 % without ITC on Residential properties outside the affordable segment
(B) GST Shall be levied at an effective rate of 1 % without ITC on Affordable housing properties
2. Effective Date:
The New Rate Shall be Applicable from 1st April 2019
3. Definition of Affordable housing Shall be:
A Residential house/flat of Carpet Area of 90 sqm in non Metropolitan cities/Towns and 60 sqm in Metropolitan cities having a value up to 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 (the whole of MMR)
4. GST Exemption on TDR/IDA, Long term Lease (Premium) FSI:
Intermediate Tax on Development right such as TDR/IDA, Lease (Premium), FSI Shall be Exempted only for such Residential Property on which Gst Is Payable.
5. Details of the scheme Shall be worked out by an official committee & Shall be approved by the Gst Council in a meeting to be called specifically for this purpose.
6. The advantage of the Recommendation made: The New Tax in Principle was Approved by the Council taking into Consideration the following advantage: