Alliance Group takes lead in offering new GST rates from March 1, 2019 onwards
"Alliance Group, a leading real estate group in Chennai reduces GST rates one month ahead of the deadline announced by the GST council."
By: Alliance Group
Welcoming the GST Council's major decision of lowering the Goods and Services Tax (GST) rates on residential properties, Mr. Manoj Sai Namburu, CMD, Alliance Group & Urbanrise stated that this will give a great boost to " the Housing for All scheme" and will benefit the aspiring home buyers at large.
The GST Council slashed tax rates on under-construction regular housing properties to 5% without ITC (Input Tax Credit) from the existing 12%. The council further cut the GST rates on affordable housing to 1% from 8% and expanded the scope of affordable housing to flats costing up to Rs.45 lakh rupees, measuring 60 sq m in metros & 90 sq m in non-metro cities.
Furthermore, Finance Minister, Arun Jaitley said the new tax rates would come into effect from April 1, 2019.
"The Council has expanded the definition of affordable housing so that aspiring people can buy better houses," Bloomberg Quint quoted Jaitley as saying.
As of now, properties purchased under Credit-Linked Subsidy Scheme (CLSS) attracted GST rate of 18%, which has been reduced to 12% after deducting the value of land. The concessional rate of 12% was applicable to only on properties under-construction and the following three components of PMAY (Pradhan Mantri Awas Yojana),
1. Redevelopment of existing slums using land as a resource component
2. Affordable housing in partnership with other entities
The exemption is now extended to properties purchased under Credit-Linked Subsidy Scheme (CLSS) as well.
How lowering GST helps homebuyers?
Reducing GST on affordable housing category from 8% to 1% will also make huge difference to aspiring homebuyers and is expected to boost the housing market.
The reduction of GST rates is likely to provide the affordable housing sector an opportunity to avail interest subsidy under PMAY scheme at a concessional rate of GST of 1%.
This is a compelling opportunity for all fence-sitting homebuyers to own homes on GST rate cut & uniform taxation of under-construction & ready-to-move homes. All things considered, "a simple and transparent tax applied on the purchase price is the biggest take-away for property buyers"
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