March 08, 2019| By Lodha Web | New GST rates - explained

New GST rates - explained

March 08, 2019 | Lodha Web

What’s the new GST rate?

The Goods and Services Tax Council has reduced the tax on under-construction houses to 5% (without input tax credit) from 12% earlier. While for affordable housing* the rate will now be 1% (without input tax credit) from 8% earlier. 

Given below is Tabulation of new GST rates depending upon size and value of houses:  

Size of Houses (in carpet area) Value of houses (Rs.) New GST rate (without ITC)
Upto 60 sqm Upto Rs.45 lacs 1%
Upto 60 sqm   >Rs.45 lacs 5%
> 60 sqm Any value 5%

On Under-construction houses in non-metro cities: 

Size of Houses (in carpet area) Value of houses (Rs.) New GST rate
(without ITC)
Upto 90 sqm Upto Rs.45 lacs 1%
Upto 90 sqm > Rs.45 lacs 5%
> 90 sqm Any value 5%

*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%.

**Metro cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR). 

From when will it be effective? 

As per GST Council recommendation, the new GST rates shall become applicable from 1st April, 2019. However, the notifications with respect to the new GST rates are yet to be issued by the Government. 

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