Builders told not to charge GST on affordable housing
The government has asked builders not to charge GST from home buyers as the effective GST rate on almost all affordable housing project is 8 per cent which can be adjusted against the input credit. It said builders can levy…

The government has asked builders not to charge GST from home buyers as the effective GST rate on almost all affordable housing project is 8 per cent which can be adjusted against the input credit.

It said builders can levy GST on buyers of affordable housing projects only if they reduce the apartment prices after factoring in the credit claimed on inputs.

In its last meeting on Jan 18, the GST Council had extended the concessional rate of 12 per cent GST for construction of houses under the Credit Linked Subsidy Scheme (CLSS) to promote affordable housing, which has been given infrastructure status in the 2017-18 Budget.

The effective GST rate, however, comes down to 8 per cent after deducting one third of the amount charged for the house, flat, towards land cost. This provision has become effective from Jan 25.

“All inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18 per cent or 28 per cent. As against this, most   housing projects in the affordable segment in the country would now attract GST of 8 per cent.

“As a result, the builder or developer will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in his books to pay the output GST…,” a finance ministry statement said.

It said that GST can be recovered from buyers only if builders recalibrate the cost of the flat after factoring in the full ITC available in the GST regime and reduces the ex-GST price of flats.

The concessional rate of 12 per cent GST was already applicable on houses constructed under three components of the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban) — (i) ln-situ redevelopment of existing slums using land as a resource component; (ii) Affordable Housing in partnership and (iii) Beneficiary-led individual house construction/enhancement.

(ends)

Related Articles

Related

Finding the right Due Diligence Tools

Choosing the best research tools for your enterprise can help reduce the time and effort you spend on exploration. These tools help you to get a better thought of a industry’s connections, financial performance, and legal record. They also allow you to identify a...

read more

TotalAV Antivirus Review

Designed with convenience in mind, TotalAV is a great antivirus collection that offers thorough Learn More Here protection against viruses, malware, malware, plus more. It features an straightforward user interface and a wide range of features to help shield your...

read more

The right way to Conduct a Board Gatherings Overview

During a table meetings overview, directors of a company discuss their latest efficiency, new business options and possible plans for you can actually future. The board also evaluates current and past strategies. The results is a strategy for you can actually growth....

read more

0 Comments

Submit a Comment

Your email address will not be published.

Share This