NEW DELHI: Prime Minister Narendra Modi on Wednesday said that the Goods and Services Tax (GST) has brought down tax rates in the real estate sector along with easing business operations for both developers and home buyers.
Addressing the “CREDAI YouthCon 2019”, he said the tax rates on construction materials have also gone down since the implementation of GST regime in 2017.
“GST has eased operations in the real estate sector, for both developers and buyers. Earlier construction sector had to pay 15-18 per cent tax. The total tax levy went above 30 per cent including many other purchases, such as tiles and other components,” Modi said
“After GST, taxes on houses for the middle-class (affordable housing) came down to 8 per cent and on other buildings, it went down to 12 per cent. Tax rates have also come down on commercial properties and construction materials.”
There have, however, been demands from the real estate sector to bring down the effective GST rates on both under-construction buildings and affordable housing segment, following which the GST Council constituted a Group of Ministers (GoM) to look into the demands and issues in the real estate segment.
The GoM has recommended 5 per cent GST without input tax credit on under-construction housing and 3 per cent GST on affordable housing. The GST Council is likely to meet on February 20 to discuss the recommendations.
Source- Business Standard.