New Delhi: National Real Estate Development Council lauded the Goods and Services Tax rate cut on real estate announced on Sunday.
The council’s national president Niranjan Hiranandani said, “Industry lauds the GST rate cut on real estate to 5 per cent on non-affordable and 1 per cent on affordable housing without the input tax credit. This will bring big relief to the home buyers.”
However, he added that the rate on cement was expected to get reduced but that did not happen.
Hiranandani added, “The GST rate on cement has not been reduced as was expected, at 28 per cent it remains among the highest taxed inputs for construction.”
In an attempt to give a boost to the real estate sector, the GST Council on Sunday decided to reduce the tax on affordable housing properties without input tax credit to one per cent.
The effective GST of 5 per cent shall be applicable without ITC on residential properties outside the affordable segment, which was also decided by the GST Council at its 33rd meeting.
According to a press statement issued after the GST Council meeting, the definition of affordable housing shall be “a residential house/flat of carpet area up to 90 sqm (square meter) in non-metropolitan cities and 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, Gurugram, and Faridabad), Hyderabad, Kolkata, and Mumbai (whole of MMR or Mumbai Metropolitan Region,” said the statement.
“Intermediate tax on development right such as TDR (transfer of development rights), JDA (joint development agreements), (lease premium), FSI (floor space index) shall be exempted only for such residential property on which the GST is payable,” further stated the statement.