New GST Guidelines for Property Buyers in India

The announcement by GST council to bring under construction flats below 5% slab. For this the builders have to purchase 80% of the building material from the suppliers have GST. There is a meeting proposed GST council meeting in January.

If you are planning to buy a Apartments in Greater Noida, the good news is round the corner for you. The GST council is planning to cut the taxes on real estate. Some of our sources are claiming that the meeting to finalize all the tigresses regarding the same will be held in January.

The moment the things will be finalized the price will go down as far as under construction units are concerned.

Sources in the GST committee claims that there are a couple of proposals that are in consideration and once one of the proposals is finalized then the rate cut slab policy will be taken into consideration and will be implemented with immediate effect.

The first proposal is around lowered 12 % GST with full input tax credit (ITC) to the builder.This will make the GST to 8% once the cost of the land is reduced. On the other hand the GST council is working on to bring the GST slab under 5% as far as under constructed flats are concerned. But this has a condition that the builders like Mahagun India has to purchase 80% of the building material from the vendors that are having the GST number.

The current situation is that the real estate sector is charged 18%. But once all the things are computed the rate will come down to 12%. 

The scrutiny committee will analyze all the aspects means all the pros and cons of the bill and if everything falls in place then the bill will be tabled in front of the GST council so that it is effected before 2019 Lok Sabha Polls. This will act as a dividend to the Modi as the 2019 election is round the corner.

The reason that the government is focusing on the under construction flats is because the builders are having huge inventory of the under constructed Flats.This is because the buyers prefer to opt for the ready to move in flats as they are exempted from GST. A slump is the real estate sector is also hurting other associated industries like steel, cement etc.

The property cost as a whole is divided in two major parts one which is done to the builder or the seller IE 80-85 percent of the total property cost and the other is 15-20 percent which is given in the form of taxes to the government.

As far as ready to move in Flats in Greater Noida concerned they are exempted from GST and they just need to pay 7-8 percent as the stamp duty of the total property cost.

The government has also done a wise thing by linking the GST benefit with it's CLASS scheme that is the Credit-Linked Subsidiary Scheme for EWS section of the society.The beneficiaries of this scheme gets a rebate of 8% in GST.

The whole idea of the government is to boost this segment and the government urges the developers not to charge any GST from the Property buyers. So that more and more buyers are attracted to buy under constructed flats like Mahagun Mantra, ATS etc. as today the focus of the buyers is in purchasing the ready to move in units. 

So, it is a welcomed move by the Government. 

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Created on Feb 28th 2019 05:52. Viewed 409 times.

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