The Group of Ministers (GOM), set under Gujarat Deputy Chief Minister Nitin Patel, is all set to meet on February 20 and make a slew of announcements regarding the housing sector, sources told Zee Media. The ministerial panel was set up last month to analyse tax rates and issues/challenges being faced by the real estate sector under the Goods and Services Tax (GST) regime. Sources said that the GOM may consider proposal of a composition scheme for the real estate sector under the goods and services tax (GST).
In its meeting, the GOM may also recommend on a new GST formula for bigger carpet area under affordable housing. The GoM may recommend 5 percent GST for under construction properties and 3 percent GST for affordable housing sector, sources had earlier told Zee Media. As per sources, the GST on said category of housing will be imposed without Input Tax Credit. The GoM discussed several issues related to home buyers in its first meeting in Gujarat.
Currently, the GST is levied at 12 percent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. Before GST came into force, under-construction housing projects attracted 4.5 percent service tax and a value added tax of 1-5 percent. The rates were separate in each states though.