GST Council approves 5 percent rate for under-construction properties
New Delhi, Feb 24 (UNI/IBNS) In what is seen as an attempt to give relief to middle class and as well a timely boost to the real estate sector, the Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, on Sunday announced that the GST payable for under construction properties will be five per cent for normal housing.
"The GST shall be levied at effective GST rate of 5 per cent without input tax credit on residential properties outside affordable segment," an official statement said here.
The GST Council meet was attended among others by Finance Ministers of Bihar Sushil Kumar Modi and of Delhi Manish Sisodia.
The statement said, "Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. 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 GST shall be levied at effective GST rate of 5pc without inputs tax credit on residential properties outside affordable segment and it shall be levied at effective GST of one per cent without input tax credit for affordable housing properties.
The effective date for the new rates shall become applicable from 1st of April, 2019, the statement said.
“We expanded the definition of affordable housing so that aspiring people can buy better houses," the Finance Minister said.