NEW DELHI: Ahead of the GST Council meeting on Thursday, builders are lobbying hard to ensure that the government allows input tax credit on under-construction residential property, while reducing the levy to 5%.
Geetambar Anand, who is the chairman on industry lobby group Credai said the overall levy should be slashed to 5%, along with input tax credit and abatement. Currently, the levy is 18% with a 33% abatement, resulting in an effective tax rate of 12%.
Jaijit Bhattacharya, president, Centre for Digital Economy Policy Research, said this would lead to effective rate of nil, which would prompt developers to file returns to claim input tax credit. Santosh Dalvi, partner at consulting firm KPMG India suggested that the Centre and the states should reduce the GST to 12% from the existing 18% and should introduce a graded abatement.
Source- Times of India.