GST council to discuss real estate issues
The teething problems in implementing GST persist. While the government is trying hard to ease the roll out of the new tax regime, the issues are still a bit confounding. The GST (Goods and Services Tax) Council is likely to meet next week via video-conferencing to approve the rules related to under-construction buildings.
It will clarify the grey areas governing the rule, according to a senior finance ministry official. In its last meeting, the council had reduced Goods and Services Tax (GST) rate for under-construction buildings from 12 per cent to 5 per cent and on projects under affordable housing from 8 per cent to 1 per cent. If sources are to be believed, the council may restrict the use of tax credits accumulated by builders and allow a concessional rate for up to 10% of commercial property, such as shops, in residential complexes, expecting developers to pare prices.
The Central Board of Indirect Taxes and Customs (CBIC) met several real estate sector representatives last week to discuss these grey areas.“The next meeting will explain the issues over which the sector has been seeking explanation. Also, the law committee of the council will approve the rules, which would be effective from April 1,” an official added.
Another important issue to be taken up by the council would be relaxation of the 80 per cent mandatory procurement from registered suppliers. “So far, the general consensus is that 80 per cent procurement norm is going to make many dealers GST-compliant. So, the council is unlikely to relax this norm. Also, there is confusion over the rebuilt property. The council largely agrees that rebuilt property must be considered as under-construction property itself. The final call will be taken at the meeting,” he added.