January 2018, Mumbai: The GST council has declared that there will be less incidence of GST for homes purchased under the Credit-Linked Subsidy Scheme (CLSS). Under-construction homes, that form a part of CLSS will be charged GST at 8 percent instead of 12 percent, a cut of 4 percent. This concessional rate will 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 Mantri Awas Yojana (PMAY Urban).
Speaking on the development, Mr. Pakshal Sanghvi, Director – Sanghvi Realty said; “Various real estate bodies have been pitching for a lower GST rate across the board. The recently considered request will lower the burden on the builder. The realtors now will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in their books to pay the output GST, in which case, they should not recover any GST payable on the flats from the buyers. They can recover GST from the buyers of flats only if they recalibrate the cost of the flat after factoring in the full ITC available in the GST regime and reduce the ex-GST price of flats.”
“This will further boost the affordable housing sector and also our upcoming economy housing project Sanghvi Rio at Vasind” said Mr. Sanghvi as he concluded.
Homebuyers pay 12 percent GST in addition to stamp duty and registration levied by states. No GST is levied on homes sold in completed project