Recently the 25th GST council meeting took some better decisions regarding the issues struck regarding various industry of India. Now there is some good news for the home buyers as the government has decided lesser GST on the home which is purchased under the Credit-Linked Subsidy Scheme (CLSS). Now the new provision states that under-construction homes that are under the scheme of CLSS will be charged GST at 8 percent instead of 12 percent. But, people who are not eligible for CLSS will be paying higher GST as decided by the authorities.
The lowered 8 percent GST as applicable from 25th January will be for the house acquired or constructed under the CLSS scheme for Economically Weaker Sections (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY Urban).
Also under the CLSS scheme, the subsidy of interest is being provided on the home loans applied by the eligible urban poor (EWS/LIG/ MIG-I/ MIGII) for construction of house or acquisition. Real estate must not be confused by the GST ambit as it is still not the part of GST but here it is related to the value of land and not the construction part.
How Would Lower GST Help?
The GST council meeting has clarified that the housing construction is already into the higher slab rates which are attracting 18 to 28 percent on many of input materials used in the construction. So as to lessen the burden of already heavy tax slabs the council has taken the decision of lower 8 percent GST on the house purchase and construction. The council stated in the meeting, “It may be recalled that all inputs used in and capital goods deployed for construction of houses attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land)”
Are there any instructions that the builder should have infrastructure status to avail 8% GST even if we are eligible under CLSS scheme and the loan is sanctioned by the bank.
Refer recommendation made at the 25th meeting of GST council. http://www.cbec.gov.in/resources//htdocs-cbec/press-release/Press_Note_Housing_Sector.pdf;jsessionid=913E158D2BAA6372BEC9A84DB8730091
Sir,
In affordable 8percent is applicable housing but in gstr1 there is no 8 percent slab how we can get the benefit of 8 percent in filing builder GST returns W.e.f 25th Jan 2018.
No use of this GST reduction as we are not getting any benefit. Builders are not transferring any benefits. Govt should fine heavy these builders based on flat buyers records.
I have purchased a flat in Bangalore under CLSS scheme of PMSAY. My builder insisting me to pay 12% GST or show me any govt order that shows 8% only to be charged. The builder does not have any written order from govt. We have to charge 12% only.
Notification no. 01/2018 has been issued by the department on 25/01/2018 for effecting such change in the rate of tax.
I purchased one flat in Feb 2018. Flat is completed in 2015 but BU permission is still awaited. Bilder has yet to complete common work like office and clubhouse under the scheme. I have availed Axix bank loan under CLSS category and same is sanctioned since building file is approved by the bank as a whole.
Now builder insists me to pay 12% GST in cash. I objected to 8% since I am CLSS category applicant and loan is sanctioned.
Please guide
Sudhi Mianhi