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25th Feb 2019

RECOMMENDATIONS OF THE 33RD GST COUNCIL MEETING

 Recently, the GST Council has recommended certain changes in its 33rd GST Council meeting held on February 24, 2019. The council proposed various recommendations to boost the residential segments of the real estate sector. All these proposals would be effective from the April 1, 2019.

Impact of the recommendations of GST Council Meeting:-
A. Revised rate chart for construction services w.e.f. 01.04.2019:-
      a) Residential properties:-
  • Affordable Housing Segment*:-  1% (without ITC)
  • Others:- 5% (without ITC)

    b) Commercial properties:- 12% ( with ITC)

Now, Input Tax Credit shall be added to cost of the builders in case of construction services of residential properties. This recommendation shall lead to better pricing in case of residential properties.

*Definition of Affordable housing:-

  • In terms of metropolitan cities:- A residential house/flat of carpet area of 60sqm having value upto Rs. 45 Lacs. Both conditions have to be fulfilled simulatiously.
  • In terms of non-metropolitan cities:- A residential house/flat of carpet area of 90 sqm having value upto Rs. 45 Lacs. Both conditions have to be fulfilled simulatiously.

Metropolitan cities are Bengalaru, Chennai, Delhi NCR( Limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai( whole of MMR).

B. GST Exemption on TDR/JDA, Lease ( premium), FSI:-

  • There was ambiguity post 01.07.2012 and in GST Regime related to taxability in case of TDR/JDA, Lease (premium), FSI etc. Now, GST council has recommended that Intermediate tax on development rights, such as Transfer of development rights, Joint Development agreement, Long Term  Lease (premium), Floor space Index shall be exempted only for such  residential property on which GST is payable.