Your dream home may get cheaper: GST Council looks at cutting tax on homes under construction.
- Team registrationADVISER
- Dec 24, 2018
- 1 min read
The GST Council is likely to consider lowering goods and services tax (GST) on under-construction flats and houses to 5% in its meeting next month, an official said. Currently, the GST is levied at 12% 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.
However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. An official said that this 12% GST rate ideally would have been partially offset by way of taxes paid on inputs by builders and hence, the actual incidence of GST on under-construction homebuyers would have been around 5-6%.
However, builders are not passing on the input tax credit (ITC) benefit to consumers. “One of the proposals before the Council is to lower the GST rate to 5% for builders who purchase 80% of inputs from registered dealers,” an official said.
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