Under-Construction Houses May Get 5% off on GST
GST reconsideration is the pressing need of the hour and that’s why perhaps the GST council may lower the tax rate levied on under-construction houses from 12 to 5 percent in its meeting next month, an official said.
Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.
However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.
An official said that this 12 per cent GST rate ideally would have been partially offset by way of taxes paid on inputs by builders and hence the actual incidence of GST on under-construction home buyers would have been around 5-6 per cent.