GST Council’s Several Recommendations To Promote Affordable Housing

Goods and Services Tax (GST) Council in its 25th meeting held on January 18, had made several important recommendations for the housing sector which are expected to promote affordable housing for the masses in the country.

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GST Council’s Several Recommendations To Promote Affordable Housing

Goods and Services Tax (GST) Council in its 25th meeting held on January 18, had made several important recommendations for the housing sector which are expected to promote affordable housing for the masses in the country.

Also Read: Govt Asked Builders Not To Take GST Charge From Affordable Housing Buyers

These recommendations to promote affordable housing came into effect from January 25, include:

  • A proposal to extend the concessional rate of GST of 12 percent (effective rate of 8 percent after deducting one third of the amount charged for the house, flat towards the cost of land or undivided share of land) in housing sector to construction of houses constructed, acquired under the Credit Linked Subsidy Scheme (CLSS) for Economically Weaker Sections (EWS), Lower Income Group (LIG), Middle Income Group-1 (MlG-1), Middle Income Group-2 (MlG-2) under the Pradhan Mantri Awas Yojana (Urban).
  • Under Credit Linked Subsidy Scheme (CLSS), subsidy would be provided on home loans taken by eligible urban poor (EWS/LIG/ MIG-I/ MIG-II) for acquisition and construction of house.

Also Read: Homebuyers Can Avail CLSS Scheme With Reduced GST Rate Of 8%

  • The credit linked subsidy would also be available for housing loans availed for new construction and for addition of rooms, kitchen, toilet, to existing dwellings as incremental housing. However, the maximum annual income for eligibility of beneficiaries under the scheme can be up to Rs. 18 lakhs.
  • The benefit of concessional rate of GST of 12 percent (effective GST rate of 8 percent after deducting value of land) applicable to houses supplied to existing slum dwellers under the in-situ redevelopment of existing slums using land as a resource component of Pradhan Mantri Awas Yojana may be extended to the houses purchased by persons other than existing slum dwellers also.
  • Another recommendation of the council is to include houses constructed for ‘Economically Weaker Section (EWS)’ under the Affordable Housing in partnership (PMAY) under the concessional rate of GST of eight percent (effective rate after deducting value of land). This will support construction of houses up to 30 sqm carpet area.

Also Read: GST Applicability On Under Construction & Ready To Move In Property

  • The council also recommends to extend the concessional rate of 12 percent to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The said notification of Department of Economic Affairs provides infrastructure status to Affordable Housing.
  • GST Council has also decided to give exemption to leasing of land by government to any governmental authority or government entity.

Source Link- https://www.aninews.in/.

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