The Union Finance Ministry recently said that the Good and Services tax i.e. GST will not be imposed on the home buyers who are offered with the completion certificate by the seller at the time of sale. On the other hand, GST will be applicable on the sale of under-construction property or ready-to-move-in flats, where the developer/builder/relator fails to offer home buyer with the completion certificate at the time of sale.
The Finance Ministry also asked the realtors to bring down the prices of residential properties and this can be done by offering the advantage of low GST rates. In the statement issued by the ministry, the buyers of constructed property were enlightened with the fact that no GST [Goods and Services Tax] is applicable on the sale of a complex/ building and ready-to-move-in flats which takes place after the issuance of Completion Certificate by the seller.
The statement further said that the developers can adjust GST against its accumulated input tax credit (ITC) in multiple affordable housing projects such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of state governments as they currently attract eight percent GST.
The ministry also said that the developer will have enough input tax credit in his/her account to pay the output GST as he/she is not required to pay GST in cash after offsetting in affordable projects.
The Union Finance Ministry said that that the cost of residential projects apart from the affordable ones witnessed price rise. But, the developers can offer relief to the home buyers in this manner.