The 33rd GST – reconvened council meet, presided by Finance Minister Ajrun Jaitley himself, successfully concluded in Delhi on 24th February. The meeting was conducted in person to consider the recommendations of the real estate sector, to provide relief to home buyers and to boost the housing sector. The key highlights of the meeting includes:
- GST shall be levied at effective GST rate of 5% without ITC on residential properties outside affordable segment;
- GST shall be levied at effective GST of 1% without ITC on affordable housing properties.
These changes would be effective from 1st of April 2019. At the meeting, the council also revised the definition of affordable housing to:
- A residential house/ flat of carpet area of upto 90 sqm in non-metropolitan cities/ towns and 60 sqm in metropolitan cities having value upto Rs. 45 lacs (both for metropolitan and non-metropolitan cities).
- Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).
The council also announced exemptions on TDR/ JDA, long term lease (premium) and FSI, however, the details of the same will be worked out in a preceding council meeting.
The amendments made at the meeting were aimed specifically at increasing the attractiveness of affordable homes as well as addressing the issues home buyers and real estate developers were facing in respect to tax credit. Industry stakeholders like Hiranandani, Marathon, Anarock and others have stated that the amendments are a welcome change and that the move will without a doubt increase the attractiveness of affordable homes. However, the council failed to announce any reductions in GST cement rates, a move that was much expected by many in the industry.