GST council recommends for new GST rate on affordable housing properties

Speed Post News Network

New Delhi : To boost the residential segment of the real estate sector, the GST Council at its 33^rd meeting held on February 24, 2019, recommended for an at effective GST rate of 5% without input tax credit (ITC) on residential properties outside affordable segment. The GST shall be levied at effective GST of 1% without ITC on affordable housing properties. The new rate shall become applicable from of April 1, 2019.

Definition of affordable housing : A residential house/flat of carpet area of up to 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value up to Rs 45 lakh (both for metropolitan and non-metropolitan cities). Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).

The Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of slowdown in the sector and low off-take of under-construction houses which needs to be addressed, according to a PIB release.