The 33rd meeting of the GST Council has seen some tax cuts for the middle class. The GST Council has reduced the rate of tax for under-construction housing to 5% (without tax input credit) from the present rate of 12% (after one-third abatement of land). Speaking of affordable housing, the GST rate has been reduced to one percent from eight percent.
Speaking at a media event, Union Finance Minister Arun Jaitley said that they have adopted a twin definition on housing. One on the basis of carpet area and another on the basis of cost.In metro cities, a 60 sq meter carpet area and Rs 45 lakh apartment would come under affordable housing. In non-metro areas, it will be Rs 90 square meter area and Rs 45 lakh apartment.It will come to effect from April 1st.
Bihar Chief Minister has also took to Twitter to specify more about the GST cut. He stated that GST Housing has been reduced from 8% to 1% and for non-affordable housing from 12% to 5% with ITC. Affordable housing has been changed to 90 sq metre and 60 sq metre for non-metro and metro with a capping of Rs 45 lakh for both.
As of now, GST has levied a 12% on payments made for under-construction properties and ready-to-move in flats. These flats are those that haven’t been given certificates of completion at the time of sale. This should have been confused with flats where certificates are issues at the time of sale, since there’s tax levied on them.
