What GST Council’s rate cut for real estate will mean?

Chennai: The GST Council, is all set to decide on revising the Goods and Services Tax (GST) for real estate, today.

According to reports, the move would boost buying of under-construction houses as the current GST rates forced buyers to go for ready-to-move-in properties.

Sunday’s meeting is also expected to address the issue of tax rate on lottery. No discussion was held last time on the matter as opposition ruled states wanted a physical meeting over a video-conference one, reports state.

A panel of Ministers on real estate sector led by Gujarat Deputy Chief Minister Nitin Patel had suggested bringing down the rates on under-construction properties to five per cent, without input credit, from 12 per cent and for affordable housing, three per cent from eight per cent.

The move was not implemented as non-BJP ruled States had opposed announcing of the decision in their absence in the last meeting, held through video conference.

Punjab finance minister Manpreet Badal was opposed to the move as different States have different taxation procedures and a uniform rate without discussing these would not be proper.

Interim Finance Minister Piyush Goyal, however, favoured a cut in tax rates for real estate.

“Our government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest,” Goyal had said.

A panel headed by Maharashtra fiannce Sudhir Mungatiwar has recommended a uniform rate of 18 per cent or 28 per cent on lottery. Currently a State organised lottery comes under the 12 per cent tax slab while those authorised by the State attract 28 per cent tax.

NT Bureau