The GST Council on Wednesday deferred the decision to consider a reduction in tax on under-construction houses to Sunday. Since discussions in today’s GST Council meet remained inconsclusive as certain states wanted physical meeting for this agenda, the real estate issue would be taken by the Council on Sunday, Finance Minister Arun Jaitley said. The meeting took place via videoconference.
Arun Jaitley also said that because of the rush of filing of returns, the due date has been extended till February 22 for all states and February 28 for Jammu & Kashmir. The due date for filing summary sales return – GSTR-3B – is February 20, he informed.
GST Council was expected to reduce GST on under-construction to 5 per cent and affordable houses to 3 per cent from current 12 per cent and 8 per cent. In the other decisions coming out of the meet, the Council decided to extended the deadline to file 3B returns by 2 days.
“While the reason for postponement could be lack of consensus, it perhaps gives the Council a little more time to deliberate on the recommendations of Group of Ministers to address the real estate sector issues. From a policy standpoint, restricting the input credit is not a good idea for any sector, particularly real estate which requires more formalization,” Pratik Jain, Partner and Leader Indirect Tax, PwC India said.
Earlier last month, the GST Council notified formation of a ministerial panel to study problems in the real estate sector under the indirect tax regime and suggest remedial measures. The panel is headed by Gujarat Deputy Chief Minister Nitin Patel and also have Maharashtra Finance Minister Sudhir Mungantiwar and Karnataka.
In the last meeting, GST Council gave relief to small businesses by hiking GST exemption limit from Rs 20 lakh to Rs 40 lakh and extending the composition scheme to service providers. The new exemption threshold for businesses supplying goods to register under the GST will take effect from April 1, 2019.
Meanwhile, the finance ministers of these Opposition-ruled states had expressed concerns about the discussion on lowering tax rate on residential housing citing potential leakages and no assurance of benefits reaching end-buyers.
Source : Economic Times