The Group of Minister [GoM] submitted their recommendations to the GST [Goods and Services Tax] Council ahead of its meeting on Wednesday. The GoM headed by Nitin Patel, Deputy Chief Minister Gujarat recommended a 3 percent tax on the affordable housing category meaning five percent direct relief to the homebuyers as presently it is levied at 8 percent.
The GST Council will be meeting today to take a final decision on the same. In the meeting, the council is also likely to take a decision on diminishing tax on cement from 28 percent to 18 percent as this could work in the favour of Indian property market.
According to the experts, the Narendra Modi-led Union Government is looking at the realty market closely and thus the diminishing rates in both cement and on affordable housing are being considered ahead of the general assembly elections.
Apart from the GoM, a separately formed ministerial panel on lottery also favoured tax rate revival and suggested to have a uniform GST rate. However, the final decision will be taken in the meeting.
At present, a lottery organized by the State implies 12 percent GST while a state-authorized lottery attracts 28 percent tax.
In short, the GST Council’s meeting on Wednesday will give a new dimension to the Indian real estate sector as the poor section is likely to avail benefit with the cut.
Till now, the affordable houses are designed to be constructed upto 50 sq. mtr of carpet area. However, the same is likely to get increased upto 80 sq. mtr.
Currently, 12 percent GST is implacable on premium housing and the same is scaled at 8 percent on the under construction properties falling in the affordable housing category.
However, no GST is applicable on the properties that obtain completion certificate from the authority.
The Group of Ministers includes finance ministers of Maharashtra’s Sudhir Mungantiwar, Karnataka Krishna Byre Gowda, Kerala Thomas Isaac, Punjab Manpreet Singh Badal, Uttar Pradesh Rajesh Agarwal and Goa Panchayat Minister Mauvin Godinho.