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Houses Under PMAY Now Attract 8 Percent GST

PMAY Houses 8 Percent GST

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)”

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Subodh Kumawat
Subodh has done with numerous professional degrees ranging from Human Rights to Banking along with MBA in HR Marketing. He is also interested in the field of tax-related articles and blog as per the industry based norms. Having expert knowledge in diverse sectors, he assures facts and figures along with testimony, in his articles. Working in SAG Infotech, he is a trusted author among the readers globally. View more posts
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7 thoughts on "Houses Under PMAY Now Attract 8 Percent GST"

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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

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