Finance Ministry Cleared the Doubts on GST for Completed Flats
Dec 19, 2018 Real Estate News
Even after a year of GST (Goods and Service Tax) implementation, there are still some doubts on the application of the same in the specific area of the real estate. Buyers were concerned about the implantation of GST on the properties and flats that have received the completion certificate.
On December 8, the finance ministry lead by Mr Arun Jaitely, cleared that the GST is not applicable to the flats and homes that have received the completion certificate. In the statement issued by the ministry, it stated that “It is brought to the notice of buyers of constructed property that there is no GST on the sale of the complex/ building and ready to move in flats where the sale takes place after the issue of completion certificate by the competent authority.”
Though if the buyer has bought the property that has purchased the property that is under construction or if it is ready to move in property and has not received the completion certificate at the time of registration, then the GST is applicable for the same.
The ministry has also urged the real estate developers to pass the benefits they enjoy under the GST schemes, to the buyer by slashing down the prices. This will boost the sales of the property market that has been on a slow down for a while.
The statement issued by the ministry further stated that “Builders are also required to pass on the benefits of a lower tax burden to the buyers of property by way of reduced prices/ instalments, where effective tax rate has been down.”
The ministry stated that the GST applicable for the affordable housing projects like Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana (PMAY), is only 8 percent which can be adjusted by the developers against the accumulated input tax credit (ITC).
Explaining further, the ministry in its statement added, “For such (affordable housing) projects, after offsetting ITC, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.”
The government has been putting efforts to revive the slowdown of the real estate in the country by introducing more transparent laws, reducing the interest rates of the home loans, wavier of GST, etc. It is expected that the coming year will see the much-needed rise of the market as the buyers will be more interested in buying the property and enjoy the benefits.
On December 8, the finance ministry lead by Mr Arun Jaitely, cleared that the GST is not applicable to the flats and homes that have received the completion certificate. In the statement issued by the ministry, it stated that “It is brought to the notice of buyers of constructed property that there is no GST on the sale of the complex/ building and ready to move in flats where the sale takes place after the issue of completion certificate by the competent authority.”
Though if the buyer has bought the property that has purchased the property that is under construction or if it is ready to move in property and has not received the completion certificate at the time of registration, then the GST is applicable for the same.
The ministry has also urged the real estate developers to pass the benefits they enjoy under the GST schemes, to the buyer by slashing down the prices. This will boost the sales of the property market that has been on a slow down for a while.
The statement issued by the ministry further stated that “Builders are also required to pass on the benefits of a lower tax burden to the buyers of property by way of reduced prices/ instalments, where effective tax rate has been down.”
The ministry stated that the GST applicable for the affordable housing projects like Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana (PMAY), is only 8 percent which can be adjusted by the developers against the accumulated input tax credit (ITC).
Explaining further, the ministry in its statement added, “For such (affordable housing) projects, after offsetting ITC, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.”
The government has been putting efforts to revive the slowdown of the real estate in the country by introducing more transparent laws, reducing the interest rates of the home loans, wavier of GST, etc. It is expected that the coming year will see the much-needed rise of the market as the buyers will be more interested in buying the property and enjoy the benefits.
