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Gst Cut From 12% To 5% On Under Construction Residential Projects In Gurgaon
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GST council decided to cut the impose tax on under construction housing projects to 5% with special rate of interest of 1% introduced for affordable houses to withdraw benefits of credit tax input such as building materials and paints, giving reason that builders were putting the gains in their pocket.
How to pay GST at 1% to 5% -
-It has to be paid cash ledger account only.
- However, the amount of input tax credit is assigned to construction of project which delivery date is on or after 01.04.2019 as per prescribed formula given may be used for payment according to GST liability.
GST rates for ongoing projects (under new GST scheme)
• Residential Project (affordable)- 1% (effective GST rate with no ITC)
• Residential Project (non-affordable)- 5% (effective GST rate with no ITC)
• Commercial Projects -12% (with ITC)
GST rates for ongoing projects (exercised for old rates)
• Residential Project (affordable)- 8% (effective GST rate with ITC)
• Residential Project (non-affordable)- 12% (effective GST rate with ITC)
• Commercial Projects -12% (with ITC)
*ITC means Input Tax Credit
Affordable Housing Projects –
• A residential house/ flat which has carpet area up to 968.75 Sq. Ft. and under the range of 45 lac in non-metropolitan cities, is considered as Affordable Housing project.
• A residential house/ flat which has carpet area up to 645.85 Sq. Ft. and under the range of 45 lac in metropolitan cities, is considered as Affordable Housing project.
• Commencement certificate is issued on or before 31.03.2019
• Completion certificate has not been issued or first occupation has not been done before 31.03.2019
• Flats/ units has been partly or wholly booked on or before 31.03.2019
• The Construction of the project shall be considered as started before 31.03.2019 if the earth work for site preparation for the project has been completed and excavation for foundation has been started
There were multiple taxes before GST implementation such as VAT, Stamp Duty charges, registration charges and service tax , each of that has different rate with variation in rates from one state to another. The implementation of GST in Real Estate Industry has made vital role to make the tax more simplifier in India and can range from 5% to 18% with some key factors.
Joyvillle Phase 2 is the new exiting housing project of Shapoor ji Pallonji at Gurgaon 102, would be come under the New GST scheme and only 5% tax will be implemented on its non-affordable houses. There are two important aspect of implementing GST, first aspect is GST on (goods) various construction material and second aspect is service of construction itself. Both above aspects contribute to final cost of property for owner and different rate for different stages.
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