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8% GST for houses under PMAY

Only 8% GST for houses under PMAY

The Goods and Services Tax (GST) council have given a section of home buyers something to cheer about. 

As per the recommendations of the council, for the housing sector, there will be less incidence of GST for homes purchased under the Credit Linked Subsidy Scheme (CLSS). For under-construction homes that form a part of CLSS will now be charged GST at 8 percent instead of 12 percent, a cut of 4 percent. However, people who are not eligible for CLSS will continue to pay higher GST. 

New GST for housing:
The concessional rate of GST of 12 percent (effective rate of 8 percent after deducting one-third of the amount charged for the house towards the cost of land) will henceforth (from January 25, 2018) be applicable for houses constructed or acquired under the CLSS for Economically Weaker Sections (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan MantriAwasYojana (PMAY Urban). 

Under CLSS, the interest subsidy would be provided on home loans taken by eligible urban poor (EWS/LIG/ MIG-I/ MIGII) for acquisition or construction of house. 

Real estate is still not a part of the GST framework. However, real estate here refers to the value of the land and not the construction activities (or the works contract) in the building of a house. GST is applicable on the construction cost incurred by the builder and not on the houses already constructed, which only amounts to selling of the building. 
 


Comments

  1. It is a great news. Only 5 percent GST under PMAY is a really a great sign of relief for new home buyer. A cut of 4 percent rate is really an amazing move by the central government. (http://www.mahimagroup.com/2bhk-flats-in-jaipur)

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