GST rate on real estate: Council to meet again on Feb 24 : 21-02-2019

With some state governments asking for detailed discussions on the plan to reduce the tax incidence on under-construction housing projects, the goods and services tax (GST) Council on Wednesday adjourned after a brief one-hour of video conferencing and decided to gather here on Sunday to thrash out the matter.

At least three states — Delhi, Kerala and Punjab —asked for a physical assembly of members to consider the tax changes proposed for the real state sector and lottery.

“The discussion remained incomplete today (Wednesday) through video conferencing…

A few ministers expressed their opinions and the rest will express their opinions as we will try and take a decision on this issue on Sunday,” finance minister Arun Jaitley said.

“So, the meeting stands adjourned as of day for Sunday,” he added.

Sources said a few members were able to talk on the proposals to cut GST rate on the real estate sector, no discussion on proposed rate rejig on lottery took place on Wednesday.

Speaking to a TV channel later, Kerala finance minister Thomas Isaac said he was hopeful of a consensus on the tax proposals concerning the real estate sector as there is general view that the sector needs to be incentivised, his state had serious reservations about the proposals for the lottery sector.

He added that the proposals on the table sought to cross-subsidise the relatively bigger houses (thanks to the RBI’s new definition of affordable housing) at the expense of smaller units.

On Sunday, the Council would consider a three-rate structure for under-construction properties, with each rate corresponding to different base prices. The rates could vary from 1% to 5% with higher incidence to levied on more expensive houses, and a denial of input tax credit (ITC) for the builders.

A group of ministers (GoM) on the real estate sector had suggested cutting tax rate on residential properties to 5% from 12% currently. On affordable housing segment, it suggested that GST be slashed to 3% from 8%.

The GoM on lottery has favoured a uniform GST rate of either 18% or 28%. Currently, a state-organised lottery attracts 12% GST while a state-authorised lottery attracts 28% tax.

Separately, the Council extended deadline for filing summary sales return GSTR-3B for January by two days till February 22 to ease the pressure on assessees.

“I have always followed an approach of moving as per consensus and since some of the states wanted a meeting where members are physically present, keeping the idea of consensus in mind, I adjourned the meeting to Sunday so that a physical meeting can be held and the same issue will be discussed on Sunday,” Jaitley said.

 

Source : Financial Express