New Delhi: With an aim to provide a much needed boost to the crippling real estate sector, the all-powerful GST Council in its 34th meeting on Tuesday approved a transition plan for the implementation of new tax structure for housing projects. As per the decision taken by the GST Council, the developers of residential projects which are incomplete as on March 31, will have option either to choose the old structure with Input Tax Credit (ITC) or to shift to new 5 per cent and 1 per cent rates without ITC.
“…from April 1, builders have to choose either of the options for which they will get time,” Revenue Secretary A B Pandey said. In the previous meeting on February 24, the Council slashed tax rates for under-construction flats to 5 per cent from 12 per cent and affordable homes to 1 per cent from 8 per cent, effective April 1. Further, the council has agreed on providing a reasonable time to developers. The decision will help the builders in clearing inventories, added Pandey. The next meeting of the GST Council will only take place after the general elections. Pandey, however, said that if any emergent situation arises then a meeting could be called with the permission of the Election Commission.