A panel of state ministers Friday favoured lowering
GST on under-construction residential properties to 5 per cent, from 12 per cent currently.
The Group of Ministers, under Gujarat Deputy Chief Minister
Nitin Patel, was set up last month to analyse tax rates and issues/challenges being faced by the
real estate sector under the Goods and
Services Tax (GST) regime.
In its first meeting, the GoM also favoured slashing GST on
affordable housing from 8 per cent to 3 per cent.
Officials said the report of the GoM would be finalised within a week
& would be placed before the GST Council in its next meeting.
The GST Council, headed by Union Finance
Minister and comprising his state counterparts, had on January 10
decided to set up a GoM to look into ways to boost housing sector under
GST.
"The GoM favoured lowering GST rates on residential houses to 5 per
cent without input tax credit and to 3 per cent for those under
affordable housing," an official said.
Currently, GST is levied at 12 per cent with Input tax credit (ITC) on
payments made for under-construction property or ready-to-move-in flats
where completion certificate has not been issued at the time of sale.
The effective pre-GST tax incidence on such housing property was 15-18 per cent.
GST, however, is not levied on buyers of real estate properties for
which completion certificate has been issued at the time of sale.
There have been complaints that builders are not passing on the ITC
benefit to consumers by way of reduction in price of the property after
the rollout of GST.
The GST Council, headed by Union Finance Minister and comprising his
state counterparts, had on January 10 decided to set up a GoM to look
into ways to boost housing sector under GST.
The other ministers in the 7-member GoM are finance ministers of
Maharashtra Sudhir Mungantiwar , Karnataka Krishna Byre Gowda, Kerala
Thomas Isaac, Punjab Manpreet Singh Badal, Uttar Pradesh Rajesh Agarwal
and Goa Panchayat Minister Mauvin Godinho.
Apart from Patel and Gondinho, Friday's GoM meeting was attended by
Mungantiwar and Badal through video conferencing. Also other state
ministers, who are part of the panel, too would be giving their views in
a couple of days.