Slashed GST rates to boost Home buying
22 May 2019, PUNE- The slashed rates of GST are helping home buyers in a big way. Earlier due to 12% GST, the homebuyers would preferably opt for flat booking in projects having occupation certificate or completed projects. However with the new govt. notification issued from 1st April 2019, it is expected that bookings in ongoing projects throughout the state will increase manifold, expressed CREDAI Maharashtra President Rajiv Parikh.
From 1st April 2019, the central government has offered huge discounts by slashing the rates of GST from 12% & 8% to 5% & 1%. While earlier having GST of 12% on general housing and 8% on affordable housing, considering the deductions in input credit, the final effective GST would be 5-6% and majority of realtors would pass on the benefits to the home buyers by offering discounts on flat rates.
But now the govt. has fixed 5% GST rates directly to home buyers & 1% GST rates on affordable housing for non-metro cities where the carpet area is less than 90sq mt and the total cost of flat is under 45Lakhs. However, in this new GST plan, the developers will not be able to get input credit.
For this purpose of making the new GST plan easy to understand to the realtors and remove confusions in its implementation, the CREDAI Maharashtra has organized seminars across the Maharashtra viz-Navi Mumbai, Solapur, Jalgaon, Ratnagiri, Sawantwadi, Amravati, Dhule, Kolhapur, Nashik, Malegaon, Satara, Ratnagiri etc. by getting together CREDAI Members, Chartered Accountants, GST Consultants. Present on the occasion were CA Sanket Shah, Chetan Oswal and Vishal Potdar.
The GST council had fixed 20th May 2019 as a deadline for the projects which are under construction as on date 31st March 2019, to decide upon the type of GST to be applied i.e as per new notification or as old as 12%.
Since with the new notification, there is no chance for adjusting input credit, the cost of construction has gone up to 250-300 per sq ft area. Therefore, the realtors will have to increase the rates for their flat sales, said Parikh.