GST

Option for residential real estate project to choose old or new GST rate extended to 20.05.2019

Option for residential real estate project to choose old GST rate or to avail new GST rate extended to 20.05.2019 from 10.05.2019

The date for exercising the option for residential real estate project to either stay at old GST rate (8% or 12% with ITC) or to avail new GST rate (1% or 5% without ITC) is being extended to 20.05.2019 from 10.05.2019.

CBIC has issued three notifications to give effect to the above, i.e. Notification No. 10/2019-Central Tax (Rate) , Notification No. 9/2019-Integrated Tax (Rate), Notification No. 10/2019-Union Territory Tax (Rate) all dated 10th May, 2019

Download Notifications Click Here >>

The GST Council in the 34th meeting held on 19th March, 2019 at New Delhi decided the modalities of the transition of the lower GST rates on real estate projects.

The Council in its 33rd meeting had recommended for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. 

An option was provided in case of ongoing projects whereby the promoters were to exercise one -time option to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019.

The option was to be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply.

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