What’s the new GST rate?
The Goods and Services Tax Council had announced reduction in the tax on under-construction houses to 5% (without input tax credit) from 12% earlier. While for affordable housing* the rate was reduced to 1% (without input tax credit) from 8% earlier.
*Definition of Affordable housing shall be?
Houses with a carpet area upto 60 square meter (approx. 645 square feet) in metro cities** and 90 square meters (approx. 960 square feet) in non-metro cities having value upto INR 45,00,000/- price bracket (both for metro and non-metro cities) will be considered affordable housing. The effective GST rate on these houses will be 1% (without input tax credit).
**Metro cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).
Are these rates mandatory?
As per the clarification by the GST council on 19th March, developers and builders can opt to either charge the GST as per the old rates, with input tax credit or the new rates, without input tax credit.
From when will it be effective?
This will be effective from 1st April, 2019.
RERA is an Act to establish a regulatory body for regulation and promotion of the real estate sec