GST Council meeting today; rate cut on real estate expected1 min read . Updated: 24 Feb 2019, 09:13 AM IST
- Arun Jaitley had announced that a final decision on the GST rates on housing properties, will be taken up in a meeting on Sunday
- Even in the budget speech, the then finance minister Piyush Goyal had favoured a rate cut on property
After having deferred a decision to rationalise GST rates on housing properties and lotteries in its last meeting through video-conferencing on Wednesday, the GST Council is expected to make an announcement today.
On Wednesday, several non-BJP states had disagreed to make a decision on the issue without being physically present in the meeting. As a result, union finance minister Arun Jaitley had announced that a final decision on the GST rate will be taken up in a meeting on Sunday.
There have been enough indications in the past that the government may push for a rate cut in the real estate sector. A Group of Ministers (GoM) on real estate sector, headed by Gujarat deputy chief minister Nitin Patel, had earlier this month suggested cutting GST on under-construction residential properties to 5% without input tax credit (ITC), from 12%, currently. On affordable housing segment, it suggested that GST should be slashed to 3% from 8%.
Even in the budget speech, the then finance minister Piyush Goyal had favoured a rate cut. “Our government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest," Piyush Goyal, who was handling the finance ministry then, had said.
Real estate developers are also excited about the Centre’s proposal. "Even a small increase in sales on the back of reduced GST will give some relief to developers funding issues by catalysing sales to some degree. To that extent, developers will see some improvement in their balance sheets," Anarock property consultants said in a note.
The move is expected to benefit the government also, according to a PTI report. The current 12% GST prompts buyers to opt for ready-to-move-in properties which are exempt from this high tax. A move to slash GST rates to 5% will help attract more buyers to under-construction properties, on which stamp duty and registration can be charged, the report had said.