Finance Ministry: No GST On Competed Projects, Finance Ministry
Dec 26, 2018 Real Estate News
Recently, the finance ministry clarified that those projects that have received completion certificate do not attract GST and this benefit should be passed on to home buyers. GST for projects under construction is set at 12 per cent, with effect from July 2017.
While the affordable housing scheme has a GST of 8 percent, in the case of joint development agreements of a project build between landowners and developers, the tax is at 18 per cent.
The finance ministry also announced that the council might consider bringing the real estate under the purview of the new tax regime.
As of now, the option of getting full input set-off credit that builders enjoy on ongoing projects is not applicable to ready-to-move-in flats. If that changes, it would mean higher costs for homebuyers of ready-to-move-in apartments, according to builders.
Landlords who have rented their houses for the residential purpose do up or have to pay GST in the earner rentals. But for commercial and industrial rentals, 18 percent tax is applicable if the earning is over INR 20 lakh annually.
On November 3, the GST council set the rates for the new tax regime that would range from 5 to 28 percent, with standards at 12 and 18 percent. Luxury things would be taxed at 28 percent.
While the affordable housing scheme has a GST of 8 percent, in the case of joint development agreements of a project build between landowners and developers, the tax is at 18 per cent.
Things to know
The government decided to reduce the applicable GST rate for home buy under the Credit-Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY), which is 8 percent. This concession was extended to even constructed/acquired houses under the CLSS for the economically weaker section (EWS) and to the lower to middle group income. This GST concession has also been extended to apartments of carpet area up to the 60-square metre.The finance ministry also announced that the council might consider bringing the real estate under the purview of the new tax regime.
As of now, the option of getting full input set-off credit that builders enjoy on ongoing projects is not applicable to ready-to-move-in flats. If that changes, it would mean higher costs for homebuyers of ready-to-move-in apartments, according to builders.
Landlords who have rented their houses for the residential purpose do up or have to pay GST in the earner rentals. But for commercial and industrial rentals, 18 percent tax is applicable if the earning is over INR 20 lakh annually.
On November 3, the GST council set the rates for the new tax regime that would range from 5 to 28 percent, with standards at 12 and 18 percent. Luxury things would be taxed at 28 percent.
