A ministerial panel is in favour of lowering the GST rate on under-construction properties to 5%
The seven-member panel also favours lowering the rate on affordable housing from 8% to 3%
New Delhi: Federal indirect tax body, the Goods and Services Tax (GST) Council, on Wednesday deferred a decision on lowering the tax rate on under-construction property to Sunday, finance minister Arun Jaitley, who chaired the meeting, said.
A meeting of the Council through video-conference was adjourned after some state ministers requested for a face-to-face meeting to take a call on the subject.
So far all decisions of the Council have been taken by consensus and continuing with that tradition, the Council will hold its 34th meeting on Sunday, where the proposal for a tax cut will be discussed, Jaitley said.
The move to lower the tax rate sharply with no input tax credit is aimed at giving relief to homebuyers, but it remains to be seen whether the Council will approve it without changes. The central government is keen to cut taxes on under-construction property as it may improve sentiment about the housing market and help the industry, grappling with unsold inventory. Real estate is a job creator especially for low or unskilled labour.