Under-construction flats may see a GST rate cut3 min read . Updated: 02 Jan 2019, 06:16 PM IST
This would be the 32nd meeting of the GST Council, which is chaired by Finance Minister Arun Jaitley and comprises his state counterparts. The GST Council is likely to consider lowering GST on under-construction flats and houses to 5 per cent.
New Delhi: The GST Council is slated to meet on January 10 to discuss lowering GST on under-construction flats and houses to 5 per cent, as well as hiking exemption threshold for small and medium enterprises. The council, in its previous meeting on December 22, 2018, had rationalised the 28 per cent tax slab and reduced rates on 23 goods and services.
“The next meeting is scheduled for January 10," an official told PTI.
This would be the 32nd meeting of the GST Council, which is chaired by Finance Minister Arun Jaitley and comprises his state counterparts.
Briefing reporters after the recent council meeting, Jaitley had said that the next meeting would consider rationalisation of tax rates on residential properties and raising the threshold limit for MSMEs from the current ₹ 20 lakh.
Also, the council would consider a composition scheme for small suppliers, apart from discussing levying a calamity cess as well as GST rates on the lottery.
The GST Council is likely to consider lowering GST on under-construction flats and houses to 5 per cent, an official said.
Currently, the Goods and Services Tax (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.
However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. An official said that this 12 per cent GST rate ideally would have been partially offset by way of taxes paid on inputs by builders and hence the actual incidence of GST on under-construction home buyers would have been around 5-6 per cent. However, builders are not passing on the input tax credit (ITC) benefit to consumers.
“One of the proposals before the council is to lower the GST rate to 5 per cent for builders who purchase 80 per cent of inputs from registered dealers," an official said.
Also the report of group of ministers looking into the concerns of MSMEs under the GST regime would be taken up for consideration.
Currently, businesses with a turnover of up to ₹ 20 lakh are exempted from GST. The Council could consider hiking the threshold to ₹ 75 lakh for only MSMEs.
Besides, the council would consider composition scheme for small suppliers, since it felt that the number of small service providers getting registered under GST was not on expected lines.
“An in-principle unanimous decision was taken that a composition scheme be framed for small service providers. The threshold and composition charge would be decided in the next meeting," Jaitley had said on December 22.
With regard to GST on the lottery, currently, state-organised lottery attract 12 per cent GST, while state-authorised lottery attracts 28 per cent.
A final view would be taken as to whether the status quo should continue on GST on the lottery or if there is a scope to tweak it.
Also, a view on levying calamity cess under GST would be discussed by the council.
Bihar Deputy Chief Minister Sushil Modi led-group of ministers (GoM) had in October had decided to seek states’ views on whether a state-specific or a nationwide ‘disaster tax’ should be levied under the GST.
The GST Council, the highest decision-making body of the new tax regime, had in September decided to set up a seven-member GoM to consider a cess for Kerala flood rehabilitation.
“The next GST Council meeting within 3 weeks of the last meeting clearly shows the proactive approach of the government towards concerns of the industry and to resolve them at the earliest," EY Tax Partner Abhishek Jain said.