Cost of construction of dream homes may become cheaper by at least 10 percent in the coming weeks as the Goods and Services Tax (GST) Council is like to bring about a downward revision of tax rates at the next meeting scheduled to be held on December 22.
Prime Minister Narendra Modi in a tweet hinted that the GST council may again bring down rate of several items including ‘new pneumatic tyre of rubber’ (automobile tyre), digital camera, air conditioners, dish washing machine, set top box for TV, monitors and projectors as well as construction item like cement. The council is likely to take a decision in this regard in its meeting on December 22. Business consultant Rupom Sharma throws some light on this—
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GST after implementation has been changing its course and showing varied colors. There are numerous changes that have taken place and numerous changes are going to come.
The changes takes place with the recommendation of the GST council which makes recommendation to the Union and the States on important issues like the rates, principles of levy, exemption and various other issues related to GST.
GST council has been holding number of meeting before and after implementation of GST to discuss issues that need to be improved or are required to be changed.
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The next GST Council is scheduled on 22nd December 20, 2018 which will be the 31st meeting. We can have a clue from the recent Prime Minister’s tweet that the meeting would help in rationalizing taxes on various items in the 28% slab which are of non-luxury nature.
It is to be noted that cement which is one of the main ingredient in construction is in the 28% slab and possibility is there that it will be reduced to 28% and this will have a huge boost to the real estate sector.
A reduction of 10% GST will help to reduce price of cement by around 8%. However, it should be noted that such reduction is applicable from the date such changes are notified by the Government.
So, any recommendation should not be considered as a rete change unless notified by Government
There are various other items which are in the 28% slabs which are not actually luxury items and hence it may reduce to 18% slab.
A few examples of such items which may be considered as non-luxury and we expect for reduction of the rates:
- Food preparation of flour, grouts, meal, starch or malt extract not containing cocoa.
- Preparation for oral or dental hygiene.
- Preparation and charges for fire-extinguishers; charged fire extinguishing grenades.
- New pneumatic tyres of rubber.
- Retreaded Tyres
- Inner tubes of rubber.
- Particle Board.
- Plywood
- Articles of Plaster or of compositions based on plaster, such as Boards, sheets etc.
- Pre-fabricated structural components for building or civil engineering.
- Safety Glass
- Paving Blocks, slabs, bricks etc.
- Doors windows and their frames and threshold for doors.
- Base metal mountings, fittings and similar articles suitable for furniture and doors.
- Fire extinguishers.
Rupom Sharma is a Guwahati based business consultant. Views reflected in the article are personal.