In the recent GST council 33rd meeting which was held on 24th Feb 2019 took some important decisions based on the inputs given by many of the industry experts and GoM.
The GST council slashed the GST rate on under construction houses form 12 per cent to 5 per cent for the better. The GST rate cut has been done in the wake of builders input of taxes in the overall construction of the house. The said provision and changes will be going to implement from 1 April 2019 (FY 2019-2020).
However, the GST council also withdrew the benefits of the input tax credit from both the under construction properties as well as from the affordable housing scheme where the rate cut has made to a low level of 1 per cent.
On the other hand, the Pradhan Mantri Jan Awas Yojana also saw some price cut i.e from 8 per cent to 1 per cent making the affordable housing more convenient for the common people however taking back the input tax credit.
Note that the carpet area of a house in the metro city up to 60 square metres (around 650 square feet) and in the non-metro i.e. 90 square metres (970 square feet) is accounted in the affordable housing scheme. Also, the conditions under the reduced GST rate implies that the property value must be under 45 lakh for the 1 per cent GST rate while the value more than 45 lakh would attract the 5 per cent GST rate.
