GST Council may announce rate cut for real estate
A panel of ministers on real estate sector led by Gujarat deputy chief minister Nitin Patel had suggested bringing down the rates on under-construction properties to 5%, without input credit, from 12% and for affordable housing, 3% from 8%.Updated: Feb 24, 2019 07:04 IST
The GST Council, which is set to meet on Sunday, is expected to announce a cut in Goods and Services Tax (GST) for real estate.
A panel of ministers on real estate sector led by Gujarat deputy chief minister Nitin Patel had suggested bringing down the rates on under-construction properties to 5%, without input credit, from 12% and for affordable housing, 3% from 8%.
The move was not implemented as non-BJP ruled states had opposed announcing of the decision in their absence in the last meeting, held through video conference.
Interim finance minister Piyush Goyal had favoured a cut in tax rates for real estate.
“Our government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest,” Goyal had said.
A PTI report had said that the move would boost buying of under-construction houses as the current GST rates forced buyers to go for ready-to-move-in properties.
A Business Standard report said that Punjab finance minister Manpreet Badal was opposed to the move as different states have different taxation procedures and a uniform rate without discussing these would not be proper.
Sunday’s meeting is also expected to address the issue of tax rate on lottery. No discussion was held last time on the matter as opposition ruled states wanted a physical meeting over a video-conference one.
A panel headed by Maharashtra fiannce Sudhir Mungatiwar has recommended a uniform rate of 18% or 28% on lottery. Currently a state organized lottery comes under the 12% tax slab while those authorized by the state attract 28% tax.