New Rates for Real Estate Sector
In its 33rd meeting held on 24th February'2019, the GST Council announced a major change in the rate structure of real estate sector. From the earlier rate of 12%/8% (Other Residential /Affordable), the rates were slashed to 5%/1% with the condition that ITC would not be available to the project developers. This change has been made effective from 1st April'2019 and legal notifications (NN 03/2019 to 08/2019 CT(Rate) and NN 16/2019 CT (and respective notifications in SGST/UTGST/IGST)) have been issued for the same which are summarized below.
Conditions for New Rate
In respect of projects commencing after 1st April'2019, developer has to mandatorily pay under the new rates and comply with the conditions provided for the same. For ongoing projects (as defined above), developer has the option to opt for either the old rate or the new rates with conditions. The developer who wants to opt for old rate for ongoing projects has to file Annexure IV on the portal by 10th May'2019, otherwise it shall be deemed that new rates are opted by the developer. The conditions are given below:
Exemption is provided in TDR used in such projects as given below:
*All projects are called REP (Real Estate Projects) as per RERA (Real Estate Regulation and Development Act). RREP (Residential Real Estate Projects) shall mean a REP in which the carpet area of the commercial apartments is not more than 15 percent of the total carpet area of all the apartments in the project.
**Ongoing project shall mean a project which meets all the following conditions, namely-
***Affordable residential apartment shall mean:
Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).