GoM to examine GST tax rate, composition scheme for real estate sector
The panel would also examine the legality of inclusion/exclusion of land or any other ingredient, in composition and suggest valuation mechanism
NEW DELHI: A ministerial panel headed by Gujarat Deputy Chief Minister Nitin Patel would look into the possibility of rationalisation of GST rate in real state sector besides formulating a composition scheme.
The GST Council in its recent meeting on January 10 had decided to set up a 7-member Group of Ministers (GoM) to boost real estate sector under GST regime.
The Terms of Reference (ToR) of the GoM include suggesting ways for pencilling in a composition scheme for the sector, a finance ministry statement said.
The GoM would also analyse tax rate of GST, including issues/challenges in view of the proposal for shoring up the real estate sector.
The panel would also examine the legality of inclusion/exclusion of land or any other ingredient, in composition and suggest valuation mechanism.
It would also examine various aspects of GST on Transfer of Development Rights (TDR) and Development Rights in a joint agreement and suitable model, the statement added.
The other ministers in the GoM include finance ministers of Maharashtra, Karnataka, Kerala, Punjab and Uttar Pradesh and Goa Panchayat Minister Mauvin Godinho.
Currently, GST is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.
The effective pre-GST tax incidence on such housing property was 15-18 per cent.
GST, however, is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.
There have been complaints that builders are not passing on the input tax credit (ITC) benefit to consumers by way of reduction in price of the property after the rollout of GST.
The proposal before the GST Council, headed by Finance Minister Arun Jaitley and comprising his state counterparts, was to lower GST rate on under-construction properties to 5 per cent. With consensus eluding the proposal, the Council decided to set up a 7-member GoM.
Source- Business Standard.
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