Tax rates on under-construction buildings and housing works have been reduced to 5 per cent by the GST Council today. This is definitely a piece of good news to those who want to buy a house as the tax has cut without an input tax credit, from the existing 12 per cent.
In addition, Union Minister Arun Jaitley confirmed that the GST council has also slashed rates from 8 per cent to 1 per cent on housings. This makes it easier to afford houses with a cost above Rs 45 lakh. However, these new tax rates will start from April 1, 2019, nationwide. But as of now, GST is levied at 12 per cent if completion certificate is not issued at the time of sale.
Under new changes in GST rates, builders will not be able to claim an input tax credit (ITC). Jaitley said that these modifications on tax rates will definitely give a boost to the construction sector. Both Bihar Deputy Chief Minister and Finance Minister Sushil Kumar Modi posted on their Twitter account that the GST rate for affordable housing was reduced from 8 per cent to 1 per cent and for non-affordable from 12 per cent to 5 per cent without ITC.
However, the discussions on the proposal by the Group of Ministers are still going as per the GST Council. Overall, the news has left many in cheers as the government can now help a bit in fulfilling the dream of a common man in owning a house.