GST Council meet
A view of the GST Council meet. Image - Twitter @arunjaitley

In order to give relief to home buyers of the country ahead of the, the GST Council on Sunday reduced tax rates on under-construction housing property to 5 per cent without input tax credit, from the existing 12 per cent.

This was informed by Union Finance Minister Arun Jaitley on Sunday.

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This decision taken by the BJP-led NDA government ahead of the Lok Sabha elections 2019 will benefit a large number of home buyers from across the country including that of the northeasten states.

It has also been reported that the GST Council also cut GST rates on affordable housing to 1 per cent from the current 8 pc and expanded the scope of affordable housing to those costing up to Rs 45 lakh and measuring 60 sq metre in metros and 90 sq metre in non-metro cities.

The new GST rates will come into effect from April 1, 2019.

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It may be mentioned that the GST is currently levied at 12 pc 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, builders will not be able to claim input tax credit (ITC) under the new GST rates.

The report quoted Jaitley as saying: “This (GST reduction) decision will certainly give boost to construction sector.”

Goods and Services Tax (GST) is not levied on real estate property for which completion certificate has been issued at the time of sale.

Informing about slashing of the GST rate on under-construction homes, Jaitely on his Twitter handle stated: “In its 33rd meeting the GST Council has accorded big relief to Real Estate Sector. GST rate on affordable housing has been reduced to 1% from 8% & for others from 12% to 5% for both without ITC.This will give boost to housing for all & fulfill aspirations of Neo/Middle classes.”