Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of a slowdown in the sector and low off-take of under-construction houses which needs to be addressed. To boost the residential segment of the real estate sector, the following recommendations were made by the GST Council in its 33rd meeting held today:

 

GST rate:

i. GST shall be levied at an effective GST rate of 5% without ITC on

residential properties outside the affordable segment;

ii. GST shall be levied at effective GST of 1% without ITC on

affordable housing properties.

 

Definition of affordable housing shall be:-

A residential house/flat of carpet area of up to 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having a value up to Rs. 45 lacs (both for metropolitan and non-metropolitan cities).

Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (the whole of MMR).

 

GST exemption on TDR/ JDA, long term lease (premium), FSI:

Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable.

 

GST Council decided that the issue of the tax rate on lottery needs further

discussion in the GoM constituted in this regard.